FTI Consulting offers alternative for investment fund wind-downs

FTI Consulting, Inc. has announced the launch of FTI Capital Management (Cayman) Limited, a U.S. Securities and Exchange Commission-registered investment adviser focused on dealing with wind-downs of investment funds.

In a press release, FTI said this provides a new alternative to extract value for investors by replacing existing managers and returning capital to investors in a “focused and cost-effective way.”

FTI Capital Management will complement its existing liquidation, independent director and other financial advisory services by offering a range of wind-down options for funds, the restructuring firm said.

“Traditionally, the options available for an independent third party to oversee a wind-down process have been limited to putting the fund into liquidation or seeking to appoint directors with wind-down experience,” said David Griffin, co-leader of FTI Capital Management and a senior managing director at FTI Consulting.

“These may still be appropriate in certain situations, but the appointment of a new manager, who is incentivized based on returns to investors, will often represent the best alternative to preserve value and the only way to maintain the intended corporate governance structure of a fund. Investment decisions should continue to be made by a registered investment adviser.”

SEC registration, combined with the firm’s global presence will allow FTI Capital Management to provide bespoke solutions that take into consideration local industry knowledge, customs and business practices, as well as deal with investments and stakeholders in all relevant time zones and geographies, the firm said.

Andrew Morrison, co-leader of FTI Capital Management and a senior managing director at FTI Consulting, added, “We are a wind-down-focused manager with specialist expertise to exit complex and illiquid positions, and we are not motivated or distracted by raising or deploying new capital. We bring objectivity to our commercial analysis and identify the optimal realization strategies, without being constrained by prior investment decisions, views or recommendations.”

Andrew Morrison

Mr. Griffin and Mr. Morrison have more than 35 years of combined experience in restructuring, with a particular focus on offshore alternative investment structures and wind-downs.

To support the offering, FTI Capital Management has hired Alastair Loxton to its senior management team. Mr. Loxton has 17 years’ experience in portfolio management, most recently within the investment management team of a multi-billion-dollar family office.