The U.K. Financial Services Authority yesterday raided the British offices of hedge fund Castlestone Management.
The search of the offices near Sloane Square followed a complaint against the firm, which manages US$540 million. Three of its four funds available in the U.K. were briefly closed to new investors last month after the Irish Central Bank, which regulates Castlestone, rapped the firm for failure to comply with UCITS IV principles.
The FSA also raided another Castlestone office in London and one in Chichester, it confirmed, but the regulator would not comment on what it is investigating.
"Castlestone Management Limited can confirm that its premises were visited by the FSA this morning as part of a regulatory investigation," the hedge fund said in a statement. "The company is cooperating fully with that investigation. A further statement will be made by the company as soon as possible."
Several hedge fund platforms, including Cofunds and Novia, have suspended sales of Castlestone's funds in the wake of the raid. Skandia appears likely to do so, as well.