Investors bid to recoup Belfry funds

A group of property fund investors are meeting today to put together a legal challenge to try and recoup some of the estimated €300m that was invested in five Belfry funds during the boom years.

Some 170 investors are meeting in the Red Cow hotel to try and work out a plan for investors to bring legal action against either AIB Private Banking, the bank that sold the investment, or one of the Belfry funds.

It is understood the investors will focus on what they believe to be a conflict of interest at the centre of the sale of the funds as the head of AIB Private Banking, John Peter Rockett, was also a director in the Belfry funds.

A spokesperson for AIB said that all investors were aware of Mr Rockett’s role.

There were an estimated 2,500 investors in the Belfry funds, many of whom borrowed money from AIB to invest in the funds. The manner in which the funds were structured meant that a fall in the property market would result in the original investment being wiped out.

The Belfry fund had borrowed an additional €1bn to invest in properties across the UK.

In November of last year at the Belfry funds’ AGM the directors confirmed that the investments had been wiped out.

One investor told this newspaper that up for discussion at today’s meeting will be why AIB was paid off before other creditors.

The Belfry Funds were managed by Cheval Properties, which was controlled by the businessman Tony Kilduff and marketed by AIB. About €120m was raised from Irish investors.