View more on these topics

Connaught continues fund suspension and seeks legal advice

Connaught Asset Management has decided to continue the suspension of its income fund series two and has taken independent legal advice on the future of the fund.

In an announcement to the Channel Islands Stock Exchange, the investment manager says the suspension will continue while it awaits the final report of independent accountant BDO LLP, on the recent trading, current financial projections and financial model of Tuita plc and its subsidiaries.

The report is now expected on the week of May 28. This will then be reviewed in conjunction with the legal opinion with a further announcement to be made following a meeting on June 12.

Connaught was looking to resume normal dealing on the fund by May 14, however, the firm’s board of directors agreed at a meeting on May 21 to continue the suspension of the net asset value of the fund and the issue and redemption of units in the fund.

On March 7, Connaught, which is not regulated by the FSA, suspended one of its three Ucis funds, the income fund series one, while it commissioned a review into the true value of the fund. It has since contacted investors to tell them the fund is unable to pay their scheduled quarterly interest payments after bridging lender Tiuta, which is backed in part by the fund, told the asset manager it will be late paying its own interest payments.

The income fund series one has about £120m of assets while the series two fund has about £18m. The income fund series three, which has £10m of assets, has not been affected.

The FSA issued a warning to people who have invested in two funds from Connaught in May 2011. The regulator said it believed the way they have been advertised could be misleading.

Recommended

Govt snubs mutual and diversity rule

The Government has voted down an amendment to the Financial Services Bill which would have inserted the coalition agreement pledge to promote mutuals and foster diversity in financial services into the new regulatory architecture. The coalition agreement, published in the wake on the 2010 general election, committed the Government to promoting mutual ownership and diversity […]

Review could see Aviva trim back in the UK

Advisers expect Aviva to cut back its UK product range as the company prepares to undertake a strategic review of its worldwide businesses. Last week, Aviva executive deputy chairman John McFarlane confirmed the provider would “sensibly” exit any businesses that do not form part of its future following the review. He said: “We will be […]

Fund firms issue gold warning

Skandia, Fidelity Worldwide Investment and Eden Financial have warned investors they do not feel gold is a safe-haven asset. Gold is skirting a bear market with gold futures trading at close to $1,593 an ounce on May 21, a 15 per cent drop from a high of $1,881 on August 29. Skandia head of multi-manager […]

Transact tops The Platforum Q1 leaderboard

Transact has topped The Platforum leaderboard for the first quarter of 2012, with Skandia in second place and Standard Life in third. Nucleus came in at fourth place and Axa Elevate rounded off the top five (see table below). The leaderboard, published this week, examines platforms’ overall performance in terms of financial strength, percentage increase […]

Partied out and penniless

December has left me destitute. My piggy bank lies broken and empty, my lunchtime meal deal feels like an extravagant expense and I’m down to the Bountys in my box of Celebrations. But I won’t mourn my dearly departed pennies. Between buying gifts for loved ones (then deciding to keep them for myself) to treating […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Even though Connaught is not regulated by FSA, I am concerned about the subjective assessment by that august body that,”it believed the way they have been advertised could be misleading.”

    And we all know what that means.

    Take out your chequebooks, ladies & gentlemen.

    Roll on retirement.

  2. Unfortunately whilst a product isnt regulated if someone receives advice from an authorised individual the advice is so a claim under FSCS could be forthecoming.

    This stupid situation should be stopped.

  3. The silence from Tiuta is deafening. Precisely why Tiuta can’t make the interest payments when they receive the interest in full and up-front from anyone who takes out a bridging loan with them is a mystery?

  4. Connaught made their profits when the investors stumped up their cash. Their partner ‘Tiuta’ handed out the money like water without regard to the small technical question of repayment. The cessation of interest payments means defaults by the borrowers. Who knows how long Tiuta has paid investors with Connaught’s cash rather than borrowers’ interest??

  5. Tiuta and connaught have parted ways. As they were the ‘guarantors’ for this fund then cue another FSCS levy. Why oh way don’t certain ‘advisers’ learn that if it looks too good to be true them it is.

  6. Tiuta is clearly unable to honour its commitments when they fall due. Investors in Connaught and others must draw their own conclusions from this sad fact of life. The only surprise is that they have continued for so long. Given that Tiuta has lent money at 1.5% per month and pledged just 7.5% per annum to the Connaught investors, it is obvious that Tiuta is faced with massive defaults. This would mean that in excess of 50% of their loans are non performing. The BDO report and ‘legal advice’ will make interesting reading although it will inevitably hold few surprises.

  7. My wife and i took out investments with Connaught on the advice of our financial advisor.Now we have no idea if we will ever see our money again.We did’nt even know that the fund had been suspended.
    Is there any action committee being set up by investors?

  8. My Dad has invested on the advice of his investor too. If you email me I can give you some information which may be helpful to you

  9. I also invested on advice. Please let me have any information that may be helpful. As I understand it we may recoup 50% of our investment which is a disaster.

Leave a comment