Student property investment specialist Brandeaux has suspended its fund range from trading due to liquidity concerns, leaving investors stuck in the funds and unable to redeem their investments.
The company blamed the suspension on the FCA’s recent ban on the sale and marketing of unregulated collective investment schemes (Ucis) to retail investors.
More than £1.1bn is invested in the sterling share classes of three funds - the Brandeaux Student Accommodation, Brandeux Dual Asset and the Ground Rent Portfolio Plus funds - which are all domiciled in the British Virgin Islands.
Brandeaux is currently trying to sell off assets to create liquidity, with the directors seeking to sell up to 80 per cent of the value of the Ground Rent Portfolio Plus fund and its foreign currency share classes.
In a statement, chairman Kay Brandeaux and chief executive Roger Boyland insisted the funds “are all performing positively” and “remain completely solvent”.
“There is no basis for investors to ‘panic’ or to worry that they have ‘lost all their money’,” the statement said. “All Brandeaux funds remain completely solvent and can meet all of their operational cash needs.
“Our mandate continues to be the delicate balance of maintaining the preservation of investors’ capital versus the duty to provide liquidity when demanded by investors. The suspension of all Brandeaux funds is aimed at this goal.
“While it has been frustrating for investors and ourselves in providing liquidity quickly enough to satisfy all investor demands, we are taking steps to resolve this position.”
Brandeaux said it was “optimistic that the transactions will complete in the near future” but admitted the outcome of the transactions “cannot be predicted”. It intends to give a further update at the end of the month.
