Chaos at LMS as closure of fund agreed

THE WIND-DOWN of troubled private equity fund LMS Capital could take more than three years after the failure of efforts to resolve a dispute between chairman Robert Rayne and a group of independent directors.

The group of non-execs, led by John Barnsley, yesterday called on Lord Max Rayne’s son to resign, just weeks after he and his allies formed a “concert party”, representing about 35 per cent of the shares, in an attempt to trigger a break-up.

“The Independent Committee has sought to structure an exit for the Concert Party, but it has not been possible to establish a price at which the Concert Party would be willing to sell its holding and at which a buyer or buyers for those shares could be found in current market conditions.”

Now the fund will write to shareholders asking for an “orderly wind-down”, which will take more than three years, according to sources.

City A.M. understands some informal discussions were held over a sale of the Rayne group’s stake but a spokesman denied seeking to agree a sale price. The concert party said it “has never sought to have its shareholding bought by the company, nor has it sought any different treatment for its shareholding from that of other shareholders.”

Rayne’s group has been concerned by the price LMS shares, which have traded at a 30 to 35 per cent discount to their net asset value since 2006.