The High Court has approved a distribution plan for most of the clients of failed UK-based discretionary fund manager (DFM) Strand Capital to have their investments returned to them in full.
A statement from special administrators Smith & Williamson provided no details about the clients who should not expect to receive all of their money back.
It told International Adviser that there were corporates and one pension scheme which were not getting compensation. The scheme’s structure played a part in affecting its ability to ask for reimbursement.
Important insolvency milestone
Strand Capital went into administration in May 2017 following the breakdown of an internal management buyout, with 2,500 clients holding investments with the company.
Most of the costs relating to administrators, lawyers and others involved, such as custodians, are being borne by the Financial Services Compensation Scheme (FSCS).
The UK lifeboat scheme made its first compensation payments to Strand customers in 2018, totalling £5.7m ($7.5m, €6.7m).
Clients need to get touch with Smith & Williamson to provide details of where their assets should be sent.
Adam Stephens, partner at the administration firm, said: “We believe this distribution plan provides the best outcome for Strand’s clients, as we are now able to return almost all clients’ assets to them in full.
“The approval of the distribution plan, with the support of the FSCS, represents the achievement of an important milestone in this insolvency”.
History
Strand filed an application in the High Court for a special administration order on 15 May 2017 because it had become insolvent.
The firm had to take these steps after the failed management buyout, which resulted in staff departing in March 2017.
This, linked with the breakdown of the relationship with the company’s trading platform provider, resulted in the appointment of the current director and an agreement with the Financial Conduct Authority (FCA) to cease carrying on regulated activity.
The FCA agreement stopped Strand from dealing with client monies and client assets in 2017.
