Krono Partners went into administration in September 2018. Unusually for an unregulated investment going into administration, its management claims there are more than sufficient assets to meet its debts, but after bank accounts operated for the company by Jade State Wealth were frozen, it became unable to maintain payments to investors.
The last update revealed that the repayment of investors’ funds was almost entirely dependent on a “Company X” operating an Exchange Traded Note platform, in which Krono had invested in return for a cut of any funds raised via that platform.
As at the latest update, filed by the administrators Smith & Williamson in April 2019, no such cuts have yet been received. Indeed the only funds recovered since the last update are £4,041 in cash in the bank.
The administrators reveal that “Company X” is in the process of raising £1.25 billion across 4 projects, plus a fifth project with “fund raise level to be determined”. The percentage that Krono can expect from these fund raises is not stated.
Two are described as being in their final stages, with completion anticipated in the next two and three months. Another is anticipated to complete its first tranche within two months. The fourth apparently has “good interest” despite being in an area with “an element of geo-political risk”, as a result of which “local investors to the specific region are the most likely funders”.
A further two small projects are reported to be ongoing, plus a further six projects that are currently inactive but may be active in the future.
The administrators are remaining tight-lipped as to who Company X is and what these specific projects are, “as to do so may jeopardise the success of the projects and ultimately recoveries for the Company”. Seems quite difficult to me to raise a billion and a quarter pounds in secret, but why not.
Krono’s other assets include listed shares in a US company (recoveries: “likely to be negligible”), unlisted shares in the US (“uncertain”), micro loans (“has proved challenging… we are however currently exploring potential interest in acquiring these debts”), and intellectual property (“unlikely”).
All eyes therefore remain on Company X – as they were since the original Statement of Affairs showed that Company X accounted for almost 80% of anticipated realisations.
All a very far cry from Krono’s original investment memorandum for its “Distressed Asset Bonds”, which advertised that investment in distressed properties would provide “predictable, steady returns”.
Total recoveries now stand at £127k. Just over £10k has been paid out in legal fees and VAT, while Smith & Williamson has so far incurred fees of just over £100k.
The Financial Conduct Authority reviewed Krono Partners in 2014, shortly after launch. After four months it closed its case and took no further action.