With already $1.8B in investor funds, GPB Capital Holdings is now placing a pause on raising more funds while it concentrates on putting in order the accounting and financial statements of two of its biggest funds, the GPB Automotive Portfolio and the GPB Holdings II. Both, collectively have raised nearly $1.3B in investor money. To date, the two funds have paid brokers $100.1M in sales commissions.
The halt comes after GPB Capital, which is a top seller of risky private placements and concentrates on purchasing auto dealerships, missed its April deadline to file financial statements for the two funds with the US Securities and Exchange Commission. According to GPB Capital CEO David Gentile, in a letter that InvestmentNews was able to get a copy of, the delay in filing is a result of having to deal with accounting standards that mandate the two funds generate yearly audited financial statements that must be in compliance with SEC regulations, as well as with the Public Company Accounting Oversight Board’s standards.
Gentile, who headed up his own accounting and advisory firm before launching GPB in 2013, said that “best practices and efficient reporting are a top priority”— hence the temporary halt in accepting money from new investors. Meantime, fund redemptions have been suspended and reportedly will resume after the financial statements and public filings are submitted.