Exclusive: Tiuta and Connaught part ways

Exclusive: Tiuta and Connaught part ways


Following a Connaught board meeting on May 21 2012, B&C has discovered that Connaught Asset Management (Guernsey) Limited Board of Directors have agreed to continue the suspension of the Connaught Asset Management Fund and the calculation of the Net Asset Value (NAV) of the Fund.

The Fund, which is a main provider to the bridging industry – providing funding lines for Tiuta plc and Mayfair Bridging – continues its ongoing suspension of the issue and redemption of units, which was first reported in B&C back in March.

Despite being a major source of funding for Tiuta, the continued suspension is unlikely to affect trading as Tiuta has exclusively revealed that it has secured several new funding lines to continue its business transformation process and set it up for more profitable loan trading in the future.

Steven Nicholas, Managing Director of Tiuta, commented: “For several months, Tiuta has continued to review its business model and decided some time ago that to secure its long-term future, establishing several new funding lines offering better value to the business was an essential part of this process.

“Tiuta has now secured several new funding lines, allowing it to be more competitive in the market. In addition, Tiuta is also in the process of securing additional investment into the business so that it can continue to thrive.

Steven explained that, as a result, the bridging lender “has started a process of reducing its dependency on the lending facilities from the Connaught funds and this process has already started and will continue until all loans are redeemed.

“Our expectation is that as these loan facilities redeem, the take-on of new lending lines will more than compensate for them, but allow Tiuta to continue to be more competitive in the short-term lending market to ensure that it can remain a leading short-term lending business in the UK.”

Mike Davies, chairman of Connaught, commented on Tiuta’s decision to gradually discontinue its ties with the Fund: “We understand the commercial benefit, to Tiuta, of its decision and our objective now is to ensure a process is developed for our funds that is in the best interests of our investors.

“We are also in the process of designing some new investment vehicles for the marketplace and these will be announced shortly. We are very much working alongside Tiuta during this process and will continue to have an involvement in financing the short-term lending market for the foreseeable future.”

Addressing recent speculation surrounding internal strategies, Steven Nicholas added, “Tiuta continues to restructure to make efficiencies throughout its processes and this has involved outsourcing some of its functions and streamlining others.

“This is a strategic planned exercise and is just part of an overall strategy to ensure that Tiuta remains one of the market leaders in bridging. As a result of this reshuffle, one member of the legal team and one member of the underwriting team have been made redundant.”

B&C understands that, in a letter to investors, a Connaught Investment Advisor revealed that the Connaught Board of Directors has agreed to meet on the 12 June 2012 to consider the BDO LLP report and legal opinion regarding the future of the Fund. As a consequence of the meeting on 12 June 2012 a further announcement will be made.

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