Guernsey-based Providence Investment enters administration

Guernsey-based Brazilian debt fund Providence Investment Funds and its manager Providence Investment Management International Ltd have been placed in administration, after the directors of both companies resigned last week.

The Royal Court of Guernsey announced in a statement on the Guernsey Financial Services Commission (GFSC) website last night that it has appointed Deloitte as administration managers of the Brazilian investment fund.

Andrew Isham and Phil Bowers of Deloitte were appointed as the administration managers to Providence Investment Funds PCC Ltd (the fund) and its Providence Investment Management International Limited after the application was brought by the commission on an urgent basis following the resignation of all directors of both companies on 4 and 5 August 2016.

The statement said that Judge Finch granted the administration orders requested in relation to the company and the fund and that the former directors had notified investors on 29th July that the fund had been suspended.

The administration managers are now undertaking an “immediate and urgent review” of the records of the fund and manager and the position of monies lent to the Providence Group’s factoring company, Providence Fomento Mercantil, Investimentos e Participações Ltda. (Providence Fomento).

This includes a review being undertaken in Brazil of the records of Providence Fomento.

Brazilian debt

The minimum investment into the closed-ended absolute return fund that invested in Brazilian debt was US$50,000. The fund purchased debt of small and medium-sized businesses and lent money to the factoring company based in São Paolo for between 30 and180 days.

Prior to making this application, the GFSC said that it has been working with the now ex-directors of the fund and the manager prior to dealing with investors in the fund.

The GFSC added that it has been working with the US Securities and Exchange Commission in relation to investigations being carried out into Providence Investments, Inc, and Providence Fixed Income Fund, LLC and that it is also working with other regulators overseas “as appropriate”.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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