Regulatory Legal said it will approach the Financial Ombudsmen Service to make claims up to £150,000, and will consider court action for any larger claims.
Tobias Haynes, paralegal at Regulatory Legal, said the firm had decided to instigate legal action following the IPO withdrawal because the fund’s stagnation looked “set in stone” without financial backing from a third party.
“We are inviting investors to come to us and we will begin to pursue legal action,” he said.
The company will attempt to provide compensation to those who were advised to invest in the unregulated scheme on the grounds that it was advertised as a low risk product.
The fund was closed last July due to “liquidity issues” surrounding a “great deal of uncertainty” in the student accommodation market, in which it makes 98% of its investments, and investors have not been able to access their money since.
Last month, the company announced plans to publically float the fund on the London Stock Exchange through its subsidiary Liberty Living, with the intention of “creating liquidity” for trapped investors.
But late last week a stock market announcement from the company said the initial public offering had been withdrawn because of “adverse public market conditions”, despite a “positive response” from the public.
The law firm is also seeking to take action against the advisory firms who mis-sold the products to investors.
Only high-risk investors
In April, the company announced that it would make claims against Baker Tilly after investors were sold the British Virgin Islands-domiciled product by advisers working for RSM Tenon, which Baker Tilly later acquired.
“These are everyday people that have been caught up in somethingthey don’t really know anything about,” he said. “They had only heard good things about the products. They thought they could put everything into the product and were guaranteed some sort of return,” said Haynes at the time.
“These sorts of unregulated products should only be made available to high-risk investors.”
