A law firm is considering bringing a legal claim against a Home REIT sister fund, which has collapsed in value and is being investigated by the Financial Conduct Authority (FCA), City A.M. has learned.
Home Long Income Fund (HLIF), a vehicle set up by investment manager Alvarium in 2018, provided the basis for the now scandal-hit social housing investor Home REIT, which Alvarium floated on the London Stock Exchange in 2020.
HLIF attracted hundreds of millions of pounds from City investors, including fund managers handling M&S pension cash, on the promise of alleviating homelessness and providing a steady return to investors.
But the value of HLIF has since halved, and City A.M. revealed this week that it is also being investigated by the Financial Conduct Authority, which is also probing Home REIT.
Jennifer Morrissey, a partner at law firm Harcus Parker, which has launched an investor lawsuit against Home REIT, told City A.M. that it is considering bringing a similar claim against HLIF.
“Reports of the collapse in value and concerns raised about the Home Long Income Fund (HLIF) come as no surprise to us,” Morrissey said.
“Over the past two years, Harcus Parker’s detailed investigations into its sister fund, Home REIT, have shed light on a number of common issues, practices and connected individuals linking the two entities. We are evaluating the situation and next steps, including whether to pursue a parallel legal action against HLIF and are actively speaking to investors about this,” she added.
The specialist commercial litigation firm hit Home REIT with a lawsuit in December 2022, claiming it was “profiteering from the housing crisis” and used misleading information to raise cash.
The firm alleges that Home REIT’s business model and the security of its income stream were also “materially different from what investors were told about them.”
Alvarium spun off the arm responsible for managing Home REIT prior to listing on the Nasdaq, but it still owns Social Housing Income Advisors (SHIA), which manages HLIF.
Alvarium has also merged with Tiedemann at the start of last year to become Alti.
Alti did not immediately respond to a request for comment on Harcus Parker’s comments.
However, it has previously said it has installed a new management team at HLIF and said the FCA investigation relates to “the historic management of HLIF by certain legacy Alvarium entities”.