The admission documents of Conviviality (CVR) and Accrol Group Holdings (ACRL) should have been essential reading for investors. The disastrous performance from both these companies suggests many investors – both large and small – missed the warning signs that may have prevented a substantial loss of capital.
The share register of Conviviality, the distributor of alcoholic beverages, suggests plenty of well-known institutional investors were enamoured of this stock, which has now given notice of its intention to appoint administrators, having failed to secure a required £125m to stay in business.
We are aware that it was also a popular company for those investing in the Alternative Investment Market (Aim) for inheritance tax (IHT) planning purposes, being a seemingly reliable, dividend-paying business that many investors could easily understand; indeed, my own firm previously owned shares in Conviviality across our Aim IHT planning book. Having sold out in October 2016, we then proceeded to look foolish for the next 12 months as the share price continued its inexorable rise. Thankfully, for our reputation, that premature sale is now seen in a more positive light by our clients.