Connaught temporarily suspends income series 2
Connaught Asset Management has suspended its Income Fund Series 2 and commissioned an independent review into the future of this fund and Income Fund Series 1.
The decision comes after the Financial Services Authority issued a note to investors in Connaught Income Fund Series 1 after it failed to pay the scheduled quarterly interest payment on 13th April 2012.
Connaught said the report will be completed "very shortly" and that the decision to temporarily suspend Income Fund Series 2 was "to avoid any speculation and uncertainty".
Mike Davies, chairman of Connaught Asset Management, said: "To ensure that the appropriate next steps are taken the General Partner has already commissioned an independent review for the Fund to ensure these agreements are used with the full co-operation with the Specialist Partner to ensure investors have their monies returned."
Connaught said unlike many investments, its fund has direct security taken over every property with a current loan on behalf of the fund, additional guarantee and debenture agreements and additional direct security on unencumbered property with the full support of the Specialist Partner "to further protect investor's interests".
Davies said the loan books and monies for each fund are ring-fenced and the Specialist Partner has "always paid the quarterly distributions on time and it is expected this will continue into the foreseeable future".
And he added: "This is seen as a very prudent decision to protect the interests of investors while it awaits the results of the independent report to confirm the fund model.
"Connaught Asset Management (Guernsey) Ltd and the Investment Manager are using this period to set up an additional process for provisioning up-front for future investor distribution payments and for quarterly independent reporting on the continuing robustness of the Fund models to ensure that going forward there is no doubt regarding the Fund's ability to secure both the income and capital for investors."
The asset manager anticipates that the report will confirm that the specialist partner can meet its obligations to investors.
Davies added: "In particular the temporary suspension of Series 2 is intended to ensure all investors' interests are protected while this report is being prepared to provide certainty in the future."
The manager expects the Fund to resume normal dealing by no later than the mid-month dealing day of 14th May.
Davies said: "I would like to personally thank both IFAs and investors in general for the huge support we have received regarding this process and review period, and we will continue to work solely in the best interests of investors.
"I would also like to stress that this does not have any effect at all on any other Funds managed by Connaught."
bridging lender Tiuta is partly backed by Connaught Income Fund Series 1 while Mayfair Bridging is backed by Income Fund Series 2.
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