In shock to investors, GPB Capital reported significant losses in the value of its investment funds, which are in the form of private partnerships that invest mainly in automotive dealings and waste management businesses.
The value of the two GPB Holdings II and GPB Holdings, GPB Holdings II and GPB, has decreased by 25.4% and 39% respectively.
According to documents from GPB sent to keepers and investors, it means that seeing its investment to $ 37,300 by an investment bought $ 50,000 of GPB Holdings II. For an investor who purchased $ 50,000 in the GPB Automotive Portfolio, this position now has an estimated value of $ 30,460, according to GPB.
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Both funds raised $ 1.27 billion from investors and accounted for the majority of the GPB Capital portfolio. In total, the GPB has raised $ 1.5 billion; Brokers sellers sold the securities to rich clients in $ 50,000 pieces to $ 100,000. A further five smaller GPB funds reported a decrease in the estimated value of 25% to 73%, according to GPB.
When investments were made in distributions, investments in GPB Holdings II and GPB Portfolio Automotive, respectively, decreased by 13% and 25% respectively. The company is addressing issues from broker-dealers and investors regarding the value of their private placement.
At the end of April 2018, the company missed a deadline for reporting financial information under GPB Holdings II and the GPB Automotive Portfolio.
Since then, GPB has several other considerations. Fidelity National Financial Services recently discussed whether the private placements from its platform would be discontinued as GPB was trying to determine the value of the funds. The estimated GPB values for the funds are at the end of 2018. The company intends to issue quarterly valuations in the future.
In recent years the GPB has been the main sponsor and manager of private, alternative investment placements sold by brokers operating by independent broker-dealers.
According to its website, more than 160 companies are a portfolio at GPB. Brokers usually received commissions of 7% from the private placements, much higher than for mutual funds.
GPB funds are sold up to 60 IBDs. Although many businesses were smaller, there were four Group-Dealers Group: Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp.. and Financial Services Woodbury Inc.