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Connaught administrator says it is too early to determine losses

Connaught Asset Management administrator Peter Hollis says it is too early to determine the full extent of the losses within the asset manager’s Ucis funds or indicate when investor monies will be recovered.

Last week, Money Marketing revealed CAM appointed Hollis of KPF Advisory as administrator on 18 September, the same day Tiuta Plc’s directors filed a notice of intention to place their firm into administration.

Two former Tiuta Plc subsidiaries, Tiuta International and Tiuta Development Finance, used the Connaught Income Fund Series 1 and Series 2 Ucis funds respectively as funding lines.

CAM’s £118m Series 1 fund was suspended in March over concerns about its true value, 14 months after Tiuta Plc warned CAM it had suffered “significant losses”. CAM also suspended its £18m Series 2 fund in March to “avoid speculation”.

Last month, Money Marketing revealed Tiuta Plc made a pre-tax loss of £37.8m in the 18 months to 30 September 2011.

CAM decided to wind down the Series 1 and Series 2 funds in June. A £22m Series 3 fund, which was not linked to Tiuta loans, was wound down in July due to a spike in redemptions.

CAM bought Tiuta International and Tiuta Development Finance for £1 each in June to manage the redemption of their loans. In July, Money Marketing revealed CAM had placed Tiuta International into administration.

Last month, Money Marketing revealed investors in the Series 1 fund faced losses of up to 50 per cent. An independent review by Duff and Phelps suggested recoveries would be between £46.5 and £53.2m of the £105.5m used to fund Tiuta. Last month, CAM said it could take up to two years to determine the full extent of the losses in Series 1.

Earlier this month, Money Marketing revealed 92 per cent of investors voted in favour of placing the £118m Income Series 1 fund into liquidation.

Hollis says: “It is too early to put a timescale on the whole process.”

An investor in the Series 1 fund, who wishes to remain anonymous, says: “We hope that now Connaught is in administration we will get the truth and recover investor monies.”

Last week, the FSA confirmed it approved Tiuta’s decision to place itself into administration on 11 September, but the courts are yet to approve David Rubin & Partners as the firm’s administrator.

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