92% vote to liquidate Connaught Series 1

Investors last week voted overwhelmingly in favour of liquidation for Connaught Income Fund Series 1, which helped provide funds to bridging lender Tiuta.

At an investors’ meeting at the National Exhibition Centre in Birmingham last Wednesday, over 92 per cent of investors present chose a formal insolvency process to wind down the unregulated collective investment scheme, which at one stage was £118m in size.

At the meeting, investors also chose to replace BDO as the administrator of Tiuta International Limited, the arm of Tiuta plc which used £105m of Series 1 funds as a funding line, and to replace the firm with Duff & Phelps. Tiuta International entered administration last month with the loan books sold to Connaught for £1.

Connaught Asset Management had the casting vote and chose to honour the wishes of investors in appointing D&P as the fund’s liquidator.

Investors were faced with three options regarding the future of the Series 1 fund. Around 6.5 per cent voted for an informal wind down of the fund and around 1 per cent voted for a formal termination without an insolvency process. Both of these options would see asset manager Connaught Asset Management, general partner Connaught Administration Services and fund operator Blue Gate stay in control of the fund. A formal insolvency process is likely to be more expensive but it is more likely to allow investors to find out more about the downfall of the fund.