A rescue plan for collapsed discretionary fund manager Strand Capital has been approved by the High Court, under which “nearly all” of the 2,500 clients holding investments with Strand will have these returned to them in full.
A note from administrators Smith and Williamson says that “in almost all cases” the costs have been borne by the Financial Services Compensation Scheme, making the return of assets possible.
Smith and Williamson partner Adam Stephens says: “We believe this distribution plan provides the best outcome for Strand’s clients as we are now able to return almost all clients’ assets to them in full. The approval of the distribution plan, with the support of the FSCS, represents the achievement of an important milestone in this insolvency.”
Strand’s insolvency dates back to 2016, when the firm explored a management buy out as the main shareholder prepared to sell their interest.
The buy out failed to materialise, and key senior management, who held the relevant FCA regulated controlled functions, left Strand in March 2017.
Smith and Williamson says this was linked to the the breakdown of the relationship with the Strand’s trading platform provider. Strand agreed with the FCA to cease carrying on regulated activity – effectively prohibiting Strand from dealing with client monies and client assets, leading to its insolvency.
Strand had around £86m in assets under management at the time of insolvency, according to estimates.
Money Marketing revealed in 2018 that the FSCS had already paid out at least £6m in compensation, while, earlier this year, administration documents revealed that the administrators themselves had racked up fees in excess of £2m for their work.