Two former UBS Wealth Management executives have won a High Court battle entitling them potentially to hundreds of thousands of pounds in commission for helping to raise money for a now suspended property fund.
Matthew Welsh and Paul Hilton introduced the Mansion Student Accommodation fund to a distributor that went on to raise the majority of the money for the fund.
Mansion suspended trading in the Channel Islands-listed Student Accommodation fund last year. The group explained that the suspension was a result of redemptions that had 'exhausted the cash reserves more quickly than they can be replenished'.
Welsh and Hilton worked together at UBS Wealth Management before creating their own separate distribution firm.
They had claimed that they were entitled to commission because they introduced Mansion to Global Wealth Management Solutions, another distribution business.
Mansion had challenged this, but in her ruling Judge Laing decided that Welsh and Hilton did introduce Global Wealth to the fund and were entitled to commission at a rate of 0.2% of the value of all business placed by Global Wealth with Mansion.
Court documents suggested that Global Wealth accounted for up to 90% of Mansion's business. The fund raised more than £300 million in total.
Laing added that the commission level was not capped, but was unable to confirm what Welsh and Hilton were owed.
‘It became clear during the hearing that Mansion have not given proper disclosure of the figures which would enable me to decide what Mansion should pay,’ she stated.
Laing advised that a further hearing could be necessary to resolve that question.
The commission will be paid by the Mansion Group, not the Student Accommodation fund.
UBS was not involved in this distribution deal.
The court judgment also contained a wealth of information about the development of the Mansion fund and how such products are marketed, as revealed in the next article.