Australian investors are outraged over the no-show of a Kiwi funds manager at a meeting over their frozen savings.

LM First Mortgage Income Fund executive director Peter Drake failed to front a meeting of unitholders in Sydney on Wednesday, the Sydney Morning Herald reports.

Mr Drake, who owns a $A30m Gold Coast mansion, left New Zealand for Australia aged 18.

The frozen fund, which once had almost $A1 billion ($NZ1.29 billion) in assets, made high-risk loans to property developers - and now $A441m of its $A513m worth of loans are in default.

It is reported to have made numerous related-party transactions, including a $A7.8m loan to Mr Drake himself.

Unitholders have been unable to access their investments, despite continuing to pay massive managers' fees.

They attended the meeting to vote for changes to the fund's constitution to allow a liquidity mechanism, to enable them to escape with some of their savings.

But then they arrived, they were informed the meeting was no longer binding, but was a meeting about a meeting.

The meeting was instead fronted by the fund's compliance committee chair and marketing director, who told unitholders Mr Drake was overseas.

Mr Drake is accused of unwarranted hikes in managers' fees, but refusing to allow investors to withdraw their funds.

The company's constitution is now under investigation by insolvency litigators Piper Alderman, while legal action is being taken against two other related funds, City Pacific and Equititrust.