According to an article published by This is money, the client was advised in 2010 to invest about 80% of his portfolio into a single fund called the Strategic Growth Fund. The fund’s value subsequently plummeted and was eventually suspended in May last year.
The client only realised there was a problem when his quarterly pension payment failed to arrive in June last year, according to the story, which added that when the client contacted deVere he was informed the current fund value was just £20,063 – and that if he wanted to withdraw all of it, he would be left with just £11,000 after charges.
DeVere has now reinstated the pension pot to the £89,000 value it held prior to the fund’s suspension.
This is money claimed deVere’s decision to reinstate the capital followed pressure it asserted, however deVere disputed this.
In a statement, Nigel Green, founder and chief executive of deVere, said: “I would like to make it clear that it was our investigation into a legitimate client complaint and our subsequent conversations with the client that led to a mistake being rectified; it was not as a result of the involvement of a newspaper, as has been suggested.”
As reported previously, the Strategic Growth Fund ran into difficulties last year, although it was never entirely clear why the strategy, which was marketed as a multi-manager fund, began making heavy losses. In the early years it outperformed the market and was considered a fund with significant growth potential.
According to one source familiar with the situation, in 2012 the fund manager began investing into a South African private equity company which ultimately performed badly. The owner of the private equity firm was shot dead in September of that year but, despite this, it is believed the fund manager continued to invest into the private equity firm.
The Strategic Growth Fund remains temporarily suspended, although last July investors were asked to vote on the establishment of a new fund called the Strategic Growth Liquidity Fund to which the liquid assets have been transferred, releasing around 23% for investors so far.
