View more on these topics

Connaught Ucis investors miss interest payments

Connaught Asset Management has contacted investors in one of its funds to notify them they will not receive their latest interest payments on time.

On March 7, Connaught, which is not regulated by the FSA, decided to suspend income fund series one while it commissioned a review into the true value of the fund and to determine its future.

Connaught has now contacted investors to inform them the fund was 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 would be late paying its own interest payments.

The asset manager says the review of the fund will be completed “very shortly”.

Connaught says it has a charge on every property in the fund and additional guarantee and debenture agreements.

Connaught has also decided to temporarily suspend another fund it runs, the income fund series two, to “avoid any speculation and uncertainty”. It says it expects the fund to resume normal dealing by May 14.

The fund series one has approximately £120m of assets while the series two has approximately £18m, both of which are unregulated collective investment schemes.

Connaught chairman Mike Davies was the compliance officer of Tiuta, which pulled out of regulated mortgage business in May last year, between August 2008 and July 2010, according to his LinkedIn profile.

In December, Connaught said the two funds are responsible for funding around £130m of short-term lending. There are no exact figures on the size of the short-term lending market but estimates range from £800m to £1bn.

Davies says the asset manager is taking steps during the suspension of the fund to ensure this does not happen again with income fund series two.

He says: “Connaught Asset Management (Guernsey) Ltd and the Investment Manager are using this period to set up an additional process for provisioning up-front for future investor distribution payments and for quarterly independent reporting on the continuing robustness of the fund models to ensure that going forward there is no doubt regarding the Fund’s ability to secure both the income and capital for investors.”

In June last year, the FSA issued a warning to people who invested in two funds because it believes the way they have been advertised could be misleading.

The literature described the funds as “very low risk” and “low risk”, making comparisons between investing in them and placing money in a high street or building society bank account. Connaught has since changed its literature.

Tiuta declined to comment.


FSA enforcement verdict is overturned

The FSA has vowed to continue to bring enforcement cases against senior management despite losing a high-profile test case which sought to fine former UBS UK wealth management division chief executive John Pottage £100,000 for inadequate supervision. The FSA published a decision notice against Pottage in October 2010, which imposed a £100,000 fine for misconduct […]

Energy meter

Oil prices look set to stay high but there are still problems to face for global energy funds, reports Joanne Ellul


FSA sets up £100m Arch cru consumer redress scheme

The FSA has launched a three-month consultation into establishing a consumer redress scheme to compensate Arch cru investors. If the scheme is set up all firms which sold Arch cru funds would have to contact clients to let them know if their case falls within the remit of the scheme within four weeks. Where redress […]

PPI: Govt reforms could hit people with health issues

Syndaxi Chartered Financial Planners managing director Robert Reid (pictured) says: “The impact of health issues is something the Government needs to recognise in its future policies.” The report also says 45 per cent of today’s over 50s may have to work and save for 11 years or more beyond their state pension age if they […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm