GPB Capital Holdings to focus on accounting at two large funds.
According to reports on Friday, GPB Capital Holdings, a leading seller of high-risk, high-commission private placements, will allegedly not be raising new money for a while, instead reportedly focusing on straightening out the accounting and financial statements of two of their existing funds.
GPB, which reportedly raised close to $1.8 billion in investor money since 2013, stated its intention to take a break in raising money in a letter sent to broker-dealers that sell GPB-branded private placements.
According to SEC filings, GPB Capital Holdings missed an April 30 deadline to file financial statements with the regulator for two of its largest funds, GPB Holdings II and GPB Automotive Portfolio, which combined have close to $1.3 billion in investor capital.
According to the company, dealing with proper accounting standards was purportedly the reason for the delay.
The company is also reportedly suspending redemptions of funds until the audited financial statements have been released and public filings are completed, according to the letter.
According to InvestmentNews, as many as 60 broker-dealers sold these two funds. The private placement funds, GPB Automotive Portfolio and GPB Holdings II, have reportedly paid brokers $100.1 million in commissions at a rate of 7.9% since inception.
Update on May 6, 2019
According to an article in Investment News on May 2, 2019, GPB Capital Holdings has shown no signs of filing financials a year after stating its intention to take a break in raising money while it straightens out the accounting and financial statements of two of its existing funds.
Dealing with proper accounting standards was allegedly the reason for the delay last year. What’s the hold up now? According to Investment News, “The company won’t say, but keep in mind that GPB’s CEO and lead partner, David Gentile, is a CPA. That means even the accountant isn’t doing the accounting at GPB.”
This begs the question, what is the real value of these GPB investments? Investors are apparently not the only ones with questions.
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