Following the appearance last night by Linda Woodall, director of mortgages & lending at the FCA, before an all-party parliamentary group on Connaught Income Funds, the regulator said it is seeking “fair redress” for those invested in the range.
It said: “At this stage, we believe that a negotiated settlement to address investor losses from the Connaught Series 1 Fund represents the best course of action for all parties.
“Therefore, for a limited period, we will support the parties concerned in an attempt to reach a negotiated resolution with a view to obtaining appropriate redress for investors as soon as possible.
“We encourage the parties concerned to engage constructively with us and each other for this limited period to avoid potentially lengthy and costly alternatives to a negotiated settlement. This is a voluntary and confidential process, and so we will be unable to comment further on its progress until an agreement is reached or negotiations break down.”
The funds were suspended in 2012 leading to the fund manager, Connaught Asset Management, being put into administration in September of that year.
The main reason the funds, called the Income Series 1, 2 and 3, were suspended was because the largest company they supplied credit lines too, bridging lender Tuita, collapsed. As reported at the time, in August 2012 Tuita disclosed a pre-tax loss of more than £37m after its international arm went into administration.
The eventual collapse of the fund house came more than a year after the UK’s Financial Services Authority raised concerns that the asset manager was misleading investors by advertising its funds as low risk.
