Last Updated on 4th July 2025
Suspended investment funds are, unfortunately, an issue the Chase Buchanan teams often encounter when taking on the management of client investment portfolios, often due to disappointing returns or substandard communications that prompt them to seek reliable, expert assistance.
Particularly in the offshore investment market, expatriate portfolios can include proportions of assets tied up in suspended funds, which are often sold due to the commissions payable to the adviser, but with suspended redemptions.
In practice, that can mean the client is unable to recover their funds and may have further difficulties if the underlying assets are unstable or complex. In this case, the risk may be that only a small proportion, if any, of the original investment is recoverable.
Let’s clarify suspended investment funds, how this happens, their impacts on your portfolio, and the advice and recommendations we may make to rebalance your assets.
Understanding the Reasons Your Investment Portfolio May Include Suspended Funds
There is roughly £4 billion in assets tied up in funds that have since been closed, many since 2009, with several funds we commonly encounter, all of which prevent the investor from withdrawing their capital. These include funds that experienced problems following investments in second-hand life insurance policies, where the product buyer receives the settlement when the original policyholder passes away.
Sold as low-risk investment products, a mixture of issues caused major problems, including policyholders living longer than expected and an inability to sell policies to enable fund investors to cash in. Funds we have come across with this issue include:
- Managing Partners Traded Policies Fund
- Centurion Defined Return
- Life Settlements and Argent Fund
- EEA Life Settlements Fund
Most suspended funds relate to obscure assets such as these and could also be associated with loans, varied real estate and traded life insurance.
For instance, Mansion Student Accommodation is involved in student property, Quadris Fixed Rate Distribution in forestry and CF Arch Cru Investment and Diversified Funds in shipping. Similarly, Connaught Series 1 Income invested in companies providing bridging loans.
Because those assets are specialist, tricky to value, and hard to sell, investors can find it impossible to withdraw their money, especially when assets are being sold off because they might be traded at below value, or the client might be offered only restricted withdrawals.
Examples of Suspended Investment Funds Due to Fraud Investigations
In other scenarios, clients may have invested in funds under investigation due to fraud allegations. These include the following:
- Axiom Legal Financing fund
- LM Investment Management
- Harlequin Property
While no investor wants to find that a fund is suspended on the grounds of suspected or alleged fraud, this can mean the likelihood of receiving their finances back is higher. Some clients who invested in Arch Cru Investment and Strategic Growth Fund, both of which were subject to proven misselling, have since received compensation, albeit after a lengthy and complex process.
The Potential of Recovering Invested Money in a Suspended Fund
One of the most significant challenges in trying to recoup funds is sourcing accurate information about the fund status and the underlying assets once the fund has been closed. This means investors can face considerable waits to find out whether their money will ever be returned.
Of the short list of example suspended funds, only one has indicated a timeframe for reopening the fund to enable redemptions, and others have stated that they expect to remain closed for years, if not a decade or more.
However, even without a repayment date, investors may see some returns, depending on how long it takes for assets to be liquidated. The caveat is that some element of cash loss is expected compared to the initial investment amount, given the costs linked to fund liquidation.
Clients with money invested in funds under criminal investigation may find that their prospects of getting anything back are minimal.
Guidance on Avoiding the Potential for a Suspended Fund in Your Investment Portfolio
All the funds we’ve mentioned here have a commonality: They promise consistent returns, usually illustrated with a straight-line performance graph and might guarantee returns above 10% per year.
Suspended funds are typically issued by unknown investment companies with just one or two funds. These funds hold specialist or very niche assets, and the companies pay advisers commissions on sales, which encourages them to sell these products to clients.
If you are considering any niche or unusual investment product promising sustained and high returns, it is essential to clarify whether the adviser is expected to receive a commission or contact the fund directly to ensure you have all the pertinent information.
Funds that pay advisers on a commission basis to place business with them usually have a reason they cannot attract funds under management as any other normally would, a red flag that a potential investment could be considerably higher risk than it may appear.
How to Deal with Suspended Funds in an Expatriate Investment Portfolio
Should any of this sound familiar, and you have long had suspended funds you cannot do anything with or have discovered that some of your money cannot be recouped, the first advice is to contact your nearest Chase Buchanan Private Wealth Management advisory team for more tailored support.
In many cases, the priority in the interim is to concentrate on generating real returns with the balance of your portfolio, clawing back some of the value tied into the suspended fund, and ensuring your investment account can resume growth, as is undoubtedly your goal.
Depending on the specifics, our focus may be to ensure that all assets that are not currently suspended are invested in funds and assets run by well-funded, respected, and trustworthy institutions and that every fund holds real, tangible assets with a visible market value.
Choosing funds that are underpinned by real assets ensures you participate in price movements, retain 100% liquidity, and can make changes as and when you wish.
It’s equally vital to add a good mix of funds and assets to your portfolio, selecting high-quality assets that deliver income and a strong degree of diversification that fits your long-term investment objectives.
As always, you are welcome to contact us to discuss suspended funds, the right way forward, or the best options to protect the remainder of your portfolio.
All investments carry risk, including the potential loss of capital. You should carefully consider whether investing is suitable for you, taking into account your personal circumstances, financial situation, and risk tolerance.
*Updated June 2025
