Doubts over litigation investment fund
Raid on former office of Buttonwood Legal Capital raises questions over claimed HK$1.2b fund as named business partners deny links
Concerns are growing about the viability of a litigation investment fund worth a reported HK$1.2 billion after Hong Kong regulators raided the company's former office and many of the fund's supposed business partners disavowed any dealings with it.
The firm in question is Buttonwood Legal Capital, the adviser of Centaur Litigation, an investment fund that underwrites lawsuits in various jurisdictions and takes a portion of any payout. Buttonwood has registered businesses in Hong Kong and the British Virgin Islands (BVI).
In mid-March, the Securities and Futures Commission served search warrants and removed documents and records from Buttonwood's former Hong Kong office and the office of Hong Kong Trust Company, the fund administrator for Centaur Litigation. The regulators also visited Allied Pickfords, Buttonwood's removals firm. Spokesmen for the Hong Kong Trust Company and Allied Pickfords confirmed the searches took place.
In an announcement sent to investors, Buttonwood directors wrote: "We understand that this investigation is in relation to whether named external parties have issued advertisements, invitations or documents relating to investments, contrary to section 103 of the Securities and Futures Ordinance."
Section 103 governs the sale of unlicensed funds. The fund was sold in Hong Kong but, because Centaur Litigation is unlicensed, an investor should have HK$8 million in liquid assets and meet the definition of professional investor under SFC rules. Buttonwood is not listed as an investment adviser on the SFC register.
An SFC spokesman declined to comment.
