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Problems at Greyfriars Asset Management LLP

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Posted by Matthew Goodwin on 17 May 2017

Matthew Goodwin - Tax Disputes Lawyer
Matthew Goodwin Associate-Solicitor-Advocate

In November 2016 Greyfriars Asset Management LLP was hit with a section 166 notice from the Financial Conduct Authority (FCA) (section 166 of the Financial Services and Markets Act 2000, commonly referred to as a Skilled Persons Report).

A Skilled Persons Report gives the FCA the power to instruct an independent review of specific parts of Greyfriars’ activities where they have concerns or where it is considered that further analysis is needed. The impact of the s.166 notice on Greyfriars was two-fold:

  1. An immediate and permanent stop on Greyfriars accepting any new money into its Portfolio Six funds; and

  2. An immediate suspension of Greyfriars accepting any new money into discretionary managed portfolios.

In short it meant that Greyfriars, a subsidiary of Best Asset Management Limited (part of the Best International Group Limited) had a problem.

Our financial services’ litigation team is receiving an increasing number of enquiries on what options clients have who are finding themselves with SIPPs now worth significantly less than they had hoped – particularly those invested with Greyfriars.

Through our investigations we have identified a number of Greyfriars’ recommended funds with serious liquidity problems - not least the unregulated assets within the Portfolio Six SIPP. Specific funds where we have identified problems are:

  • Any mini-bonds in The Resort Group – an unregulated property investment scheme in Cape Verde where individuals buy into “luxury hotels”;

  • Lanner Car Parks Fund – an unregulated commercial property fund investing in car parks;

  • The Olmsted Series – high-risk commercial property investment in the USA;

  • ABC Corporate Bonds I and III – high-risk unregulated commercial property investments. It is likely that others in the ABC Corporate Bonds family face similar issues;

  • Urban Student Property Fund – high-risk, commercial property investment into student accommodation.

If you are invested in these or similar funds, whether through Greyfriars or otherwise, you need to understand your options. The ABC Corporate Bonds are already in administration with others not far behind.

It is possible that the immediate outcome is not that you have lost all of your money. If your portfolio has been properly managed then it should be split across a range of investments appropriate to your risk profile. The reality, however, is that if your investments have dropped in value over the last 12 months it could well be because of poor advice. The good news is that, if that is the case, you should have an option to make a claim for loss against the professional adviser’s insurance.

Two notes of caution:

  1. Limitation – you have to bring a claim in negligence within 6 years of the negligent act (being the date of the investment) or within 3 years of finding out about the negligence. This is a strict barrier – once it is passed you can no longer claim. Do not delay.

  2. Insurance – it is likely that the professional adviser will have a set level of insurance (e.g £2million) for specific claims. If the insurer decides to aggregate all claims on specific funds together, once that money is gone, it is gone. Do not delay.

The overwhelming theme is if you are concerned about your investments, you need to do something about it now. 

About the author

Matthew Goodwin

Associate-Solicitor-Advocate

As an associate within the tax and financial services litigation team, Matthew regularly acts for corporates and individuals, dealing with a variety of disputes.

Matthew Goodwin

As an associate within the tax and financial services litigation team, Matthew regularly acts for corporates and individuals, dealing with a variety of disputes.

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