Stoltmann Law Offices, P.C. has been reporting concerns about the funds offered by GPB Capital for several months now. Our firm now represents multiple clients in FINRA Arbitration proceedings against the brokerage firms responsible for soliciting them to invest in the GPB Funds. Specifically, our clients invested in the GPB Automotive Fund and GPB Holdings Fund II.
On June 21, 2019, it was reported that GPB Capital finally issued valuations on two of its largest funds. Unfortunately for investors, these new valuations are not good. GPB Capital reported a decline of 25.4% for the GPB Holdings Fund II and a whopping 39% decline for the GPB Automotive Fund. It follows that the remainder of the GPB Holdings portfolio of funds will eventually suffer similar write-downs. These valuations are as of year-end 2018, so it is anyone’s guess what these rotting assets are worth as of today. Its truly troubling when private funds like these suffer massive losses when the broader, publicly-traded markets, like the S&P 500, have performed incredibly well for almost 10 years running.
Ongoing accurate valuation is a major problem for these illiquid opaque funds that invest in assets like car dealerships and private garbage collection companies. Stoltmann Law Offices has reviewed numerous GPB Fund materials and the concern is growing that these asset valuations by the company are going to snowball and accelerate into more rapid losses for investors. According to SEC filings approximately 60 brokerage firms sold clients investments in various GPB Capital Funds. However, the primary sellers of these toxic funds appear to have been Royal Alliance, FSC Securities, SagePoint Financial, and Woodbury Financial Services.