Gemi Investments writes off nearly $140m after failed pub build
A private credit firm that bankrolled a failed bid to build one of Australia's largest pub empires has written off nearly $140 million in loans, in a collapse that has left investors facing the loss of much of their capital.
Gemi Fund, the core lending vehicle of Sydney-based Gemi Investments, was among a small group of private credit players that stepped into the Australian property market as banks retreated from higher-risk lending.
The fund wrote off $93.5 million in loans last year, understood to reflect the bulk of its exposure to the collapsed property holdings of failed publican Jon Adgemis, who had used Gemi's backing to pursue a 22-venue hospitality empire. That writedown represented 46 per cent of the fund's total assets. A further $42.3 million was written off in
March this year, deepening the crisis at the private lender.
In January, Gemi told investors it expected to recover nothing from loans tied to four former Adgemis venues — a position likely to crystallise a $60 million loss.
The accounts paint a stark picture of a fund in freefall. In 2025, Gemi paid $33.4 million to unitholders, yet collected only $317,498 in cash from its loan book. Investors had been promised annual returns of 10.5 per cent.
Lending managers were entitled to pocket any return above that threshold, creating incentives to chase increasingly risky, higher-yielding loans.
Investors told The Australian they had been attracted to what was presented as a conservatively managed, professionally run model overseen by finance sector figures Justin Epstein, George Fleming and Michael Cooper.
Instead, most now stand to lose the majority of their capital.
Adding to investor frustration, management fees have continued to be charged throughout the collapse — totalling $1.8 million in the 2025 financial year. Critically, those fees are calculated daily and do not account for the $42.3 million writedown that occurred in March. One investor told The Australian they were deeply concerned that fees had continued to accrue on a book of failed loans.
Gemi suspended redemptions and withdrawals in July 2024 to stem an investor exodus, by which point it had already stepped back from its security position over many Adgemis assets following his refinancing deal with Deutsche Bank. The relationship between Adgemis and Gemi was notably close, with the former KPMG dealmaker's hospitality operation running from offices in Surry Hills owned by Gemi's George Fleming.
The fund's troubles have also attracted legal fire from former borrowers. Lawyer and shopping centre owner Francesco Violi attempted to sue Gemi, claiming he had never signed an $80 million loan agreement over a Griffith mall. A court found against him, with the judge ruling that while Gemi had acknowledged the documents lacked Violi's signature, he had "authorised the loans, knew of the mortgages and personally received the benefit of some of the money advanced." Violi told the court he had spent approximately $4 million pursuing the case, after an initial judgment in his favour in 2024 was later appealed.
Gemi is now winding down, with its principals targeting closure by year's end. The fund retains several assets it hopes to sell to fund distributions to investors, including a Castle Hill development site in Sydney's northeast for which new plans were lodged in March, and Channel 7's Adelaide office acquired after the firm originally lent on the property. A regional shopping centre that recently secured Best & Less and Dan Murphy's as anchor tenants is also being readied for sale.
Class action lawyers are circling. MC Lawyers principal Milan Cakic has been assembling a book of Gemi clients with a view to mounting proceedings against the beleaguered lender.
Jonathan Jackson, 26th May 2026
