Expertise in Investment Fund Management

10 December 2022

In the case, Bugsby Property LLC v LGIM Commercial Lending Limited and Legal & General Assurance Society Limited [2022], Martello was appointed on behalf of the defendant, to provide expert witness services on property investment fund management.


The dispute related to the sale of Olympia, the exhibition and events space, which was put up for sale by Capital & Counties in 2015. Bugsby claimed that in arranging finance for Yoo Consortium, L&G breached the agreement that was signed between Bugsby and L&G and ultimately led to the failure of Bugsby in acquiring Olympia. L&G admitted breaching the agreement, but argued that Bugsby has suffered no loss.


A significant proportion of the total claim amount was Bugsby’s claim that its purchase of Olympia would have allowed Bugsby to launch a property investment fund, and Bugsby was thereby claiming damages of over £160m related to the potential fund return. The expert evidence was crucial in assessing this claim, and Martello created an investment fund model in order to analyse and estimate the fund return and comment on the likelihood of success.


Our expert had over 45 years’ experience in the UK property sector, including specific experience in property investment and sourcing equity for property transactions. In his judgment, Mr Justice Knowles highlighted the challenges in quantifying a claim such as this – “this cannot be a precise exercise” – and noted the value of having expert witnesses with relevant practical experience versus academic. The judge commented that in both witnesses “the Court had two thoughtful experts” but preferred the Martello expert’s “wider experience and expertise … informed by many years of discussion with private equity investors”.


The Martello team prepared three expert reports, encompassing significant modelling of fund returns, and a joint statement. It was important that all of the calculations were independently verified and cross-checked to ensure a robust and complete analysis. Our expert gave oral testimony during the four-week trial in the Commercial Court, where it was essential that the complex model could be easily navigated and understood by the Court.


Assessing expert evidence in relation to various heads of loss, Mr Justice Knowles ruled that Bugsby is entitled to £14.9 million in damages for the “loss of a chance” to secure a key financier, losing out on a bid to purchase Olympia after L&G decided to finance with Yoo.


Mr Justice Knowles’s comments and the full judgment can be viewed here: