The company, one of the oldest independent firms within the City of London, launched its new fund – the TB Walker Crips Income from Short Term Lending Fund on the 1 August, the first regulated short term lending fund available in the UK.
It will be managed by James Allen who was formerly the funds director, in charge of sales, at Connaught AM, which is in administration after all three of its funds were suspended last year. The suspension of the funds led to the company being put into administration in September 2012.
The main reason the funds, called the Income Series 1, 2 and 3, were suspended was because the largest company they supplied credit lines too, bridging lender Tuita, collapsed. As reported at the time, in August 2012 Tuita disclosed a pre-tax loss of more than £37m after its international arm went into administration.
The eventual collapse of the fund house came more than a year after the UK’s Financial Services Authority raised concerns that the asset manager was misleading investors by advertising its funds as low risk.
However, Walker Crips said the set up of its newly launched fund is very different to that employed by Connaught. In the first instance, the fund manager, James Allen, and the new product are regulated by the Financial Conduct Authority – unlike the Connaught funds.
In addition, the institutions it will supply lending too must also be FCA regulated to be eligible for capital for loans.
Walker Crips added it should also be noted that loans from the fund are supplied directly to the borrower’s solicitor – not to the lender – and that the fund has a direct charge over the property, adding extra surety should the borrower default.
Furthermore, Walker Crips explained that, again unlike the Connaught funds, each lending application is checked, not only by Allen, but by the fund administrator T. Bailey before it will be accepted.
A spokesperson explained that these extra checks will ensure the risks which were introduced into the Connaught range, will not be present in the new Walker Crips fund.
