It comes after several investors pulled their cash out and is hot on the heels of the asset manager's decision to wind down Income Fund Series 1 and 2 which then supplied Tiuta with part of its funding lines.
That decision followed a note issued by the Financial Services Authority to investors in Connaught Income Fund Series 1 after it failed to pay the scheduled quarterly interest payment on 13th April 2012.
Mike Davies, chairman of Connaught Asset Management, said: "Despite the Income Fund Series 3 being completely separate from the Series 1 and 2 funds there has been a spike in the recent level of redemptions and to avoid any investor detriment we have reluctantly agreed that it is in the best interests of investors to let the fund naturally wind down as the assets are redeemed to the Fund.
"Investor monies will therefore be redeemed as the loans mature and the Specialist Partner, UK Acorn Finance Ltd, will continue to pay out the distributions so there is no investor detriment expected at all. The fund will continue to perform during the wind down process."
Davies called it "a great shame" and said the fund had performed very well to date and was expected to continue to perform in the future.
He added: "Investors will find it very hard to find an alternative investment offering over 8% annualised returns which has such a strong asset security. However we do understand how contagion between funds can occur so we have decided to take this decision today rather than let it to get to a point where all parties felt there may be future investor detriment.”
