It could take up to two years to determine the full losses on the £118m Connaught Income Series 1 fund and return money to investors, according to Connaught chairman Mike Davies.
Last week, Money Marketing revealed investors in the suspended fund could be facing losses of 50 per cent. Independent advisers Duff and Phelps presented investors with an outline of potential losses after revealing that £105m of the £118m assets from the Series 1 fund had been used to fund Tiuta’s lending book. Duff and Phelps predicts Connaught stands to recover between £46.5m and £53.2m of the £105m.
Duff and Phelps has written to Tiuta, calling on it to honour a guarantee to fund any losses on the Series 1 fund. Tiuta is refusing to comment on whether it recognises the validity of the guarantee.
Connaught chairman Mike Davies says: “It is not possible to crystallise what losses there might be until all the monies are returned to the fund, which is a process that could take up to two years. Everyone at Connaught Asset Management is providing assistance to administrator BDO to ensure we can recover as much money as possible for investors from the loan books of Series 1.”
Davies is pointing investors to an online investor group for updates on the situation.
He adds: “There are further meetings taking place next month and Duff & Phelps has already set up an online official investor group. It is in the process of sending log-in and password details to all relevant IFAs and investors and we would urge those concerned to use this resource for detailed information and updates.”
A Connaught investor, who wishes to remain anonymous, says: “It will take a lot longer to understand the true position of the fund and realise the capital than we would have liked. Of course, there may still be claims brought against a number of the professional services firms and against the directors and they may take even longer than two years.”
Investment Quorum chief executive Lee Robertson says: “It is a big ask to expect a private investor to wait two years before they can access their money. How can anyone plan on that basis?”