A group of unitholders say that BlackRock appears to offer the best option rather than the receiver's wind down proposal
The Bridging Finance scandal that shocked Bay Street early in 2021 continues to cause concern for investors caught up in the debacle.
The $2 billion AUM firm was placed into receivership in May last year after the Ontario Securities Commission ordered it to cease trading following an investigation into mismanaged and misappropriated funds.
PwC was appointed as the receiver and has been working on options for the sale of Bridging’s funds.
Late Monday, an announcement was issued by a group branded Concerned Unitholders of Bridging Finance Inc., calling for a separate investigation into the sales process.
In June 2021, the group called on the OSC and PwC to ensure “an orderly and transparent sale of Bridging and/or its Funds, given the multiple credible expressions of interest received to date and the need to protect the interests of Bridging's Unitholders,” adding that “the immediate sale of Bridging and/or its Funds to a qualified fund manager is critically important to ensure that Unitholder value is not eroded.”
The group’s latest communication suggests that they do not believe that the process is being correctly handled. It believes that “PwC is attempting to insert itself as an option for investors in a bid to wind down the funds while collecting exorbitant fees over 5 years and causing extensive losses to the portfolio.”
Wealth Professional has contacted PwC for comment on the group’s views.
BlackRock best option?
The unitholders’ group says that an active Private Debt manager is in the best interests of investors.
It cites BlackRock as the clear best option for the Bridging Finance funds, based on webinars held by PwC and Bennett Jones, the law firm representing investors.
The group questions PwC’s lack of experience in managing private debt and that it is not a registered portfolio manager.
It says that it is concerned that the receiver “continually projects large portfolio losses while failing to work on recovering certain loans, including First Nation loans with an approximate value of over $250 million,” and says valuing these loans as zero is reckless as they have sufficient collateral.
The group is urging those investors that want to optimize their Bridging Finance funds to demand a vote and push for active management rather than wind down.
They can be contacted at [email protected] or investors can reach out to Bennett Jones.
