KPF Advisory has been appointed as administrator, with Peter Hollis leading the process, according to reports.
The move was been taken following the collapse of the company’s Income Series 1, 2 and 3 funds, which had provided credit lines to bridging lender Tuita plc.
Tuita last month reported a pre-tax loss of more than £37m after its international arm entered administration in June. This was the part of the business Connaught’s funds had extended £105m in loans to.
Last year investors were warned over the Connaught funds because they had been advertised as low risk and the FSA felt this could be misleading.
The FSA said Connaught had made comparison between investing in its funds and putting money in a high street bank account or building society.
“Connaught’s marketing material compares the returns on its funds with fixed-rate notice bank and building society accounts. However, customers need to be aware that these bank accounts have stronger investor protections should anything go wrong an offer lower risks to your money than there is investing in the Connaught funds,” the regulator said at the time.
Series 1 of the range was suspended in March with Series 2’s closure following shortly after, in April.
Over the summer Connaught is reported to have said investors in the Series 1 fund would suffer a loss of £10m or 10% of the fund, but in a subsequent meeting a worst case scenario of only recovering £46m of the £105m loan was given.
Alistair Mawdsley, managing director at Connaught said he had been advised not to comment, but could confirm the company had entered into administration.
