Redemptions trigger further Connaught fund suspension

By Bridging Loan Directory -

 

Connaught Asset Management has announced the suspension and winding down of the Connaught Income Fund Series 3 UCIS fund. The fund was established to provide short term agricultural bridging finance.

 

Following a consultation with the Operator (Dunadd Asset Management Ltd), the Asset Manager (Connaught Asset Management Ltd) and the General Partner (Connaught Administration Services Ltd) it has been decided it is appropriate to suspend the Fund with effect from 1st July 2012 due to liquidity issues. This decision has been taken because the level of redemption requests cannot be met from existing liquidity and that in order to protect the interests of all investors the fund cannot reasonably continue to meet these redemptions without potentially placing the remaining investors in a worse position.
During the wind down process the Specialist Partner(ACORN) has confirmed that it will continue to pay interest to investors each quarter on all capital not redeemed and wind down the loan book as soon as it practicable. Connaught anticipate the wind down to be completed within 24 months, though it may take longer or be quicker.
During the suspension process all investments into the Fund and redemptions from the Fund will remain suspended. The General Partner acting on behalf of the Fund together with the Operator may authorise the release of monies on certain loans in order to maximise the Fund’s return – this may for example be the release of on-going development finance where the projects are only part completed and where it is deemed to be more likely that maximisation of repayment of the loan facility would be obtained by completing the project. The release of funds will be reviewed on a case by case basis and permitted only where it is deemed to be in the best interests of the Fund and investors to do so.
Any subscriptions into the fund after the suspension date will be returned to investors. Any redemption received prior to the suspension date will receive priority in terms of the cash utilisation and will be settled first. The 30 day payment period will still apply for those redemptions already received. Any redemption received after suspension date of 1st July 2012 will be cancelled to treat all investors fairly. All cash received from the loan repayments will be used to redeem Investor Capital in a pro rata share. The capital cash distribution will be paid quarterly or more frequent as the Operator and Asset Manager determine and subject to cash being available.

The capital cash distribution will be paid quarterly or more frequent as the Operator and Asset Manager determine and subject to cash being available. As detailed above they anticipate that all future distributions will be met by the Specialist partner and the quarterly distribution process will be unaffected. Once all capital cash and distributions have been settled, the fund will close.