FCA Ends Wellesley Probe With No Action later than £134m Investor Losses
Britain’s financial regulator has closed its investigation into Wellesley & Co Limited, drawing a line under one of the more protracted collapses from the mini-bond era but leaving thousands of retail investors nursing heavy losses.
The Financial Conduct Authority said Wednesday it found no evidence of serious misconduct at Wellesley & Co, the only authorised entity in the wider Wellesley Group. “We sympathise with investors who have lost money through their dealings with the Wellesley Group, and recognise some investors suspect wrongdoing,” said Therese Chambers, the FCA’s joint executive director of enforcement and market oversight. “We identified that the risks were fairly explained to investors and did not find evidence suggesting the funds were misused.”
The watchdog opened its probe in 2022 later than Wellesley Finance, an unregulated arm of the group, entered a Company Voluntary Arrangement (CVA) with creditors in October 2020. Around 12,000 investors were owed £134.7m at the time. Roughly £80m has since been returned, but many lost part or all of their capital. Those who took preference shares in the restructuring lost their entire stake, around £10m in total.
Property lending pitch
Founded in 2013, Wellesley pitched itself as a property-backed peer-to-peer lender that would channel retail cash into loans for small and mid-sized housebuilders. It marketed secured mini-bonds, an overseas bond issue and a P2P product. Retail purchaviewrs were told Wellesley would co-invest alongside them, assisting to give the appearance of aligned interests.
The model drew attention in the mid-2010s, including a headline loan in 2014 that was at the time the largest on a UK P2P platform. But the group’s reliance on property left it exposed. By 2020, with the pandemic roiling housebuilding and regulators cracking down on speculative bonds, Wellesley sought court protection through the CVA to avoid a disorderly collapse.
The FCA’s inquiry centred on whether Wellesley & Co misled investors in its promotions or obscured the financial health of other group entities. Investigators reviewed thousands of pages of marketing material, risk warnings, and group financial statements from 2017 to 2021, along with more than 30,000 banking transactions. They also took evidence from over 300 investors.
The conclusion: they could lose their money, were told the products carried no cover from the Financial Services Compensation Scheme, and were informed of the risk of insolvency across the group and its borrowers.
Regulatory backdrop
The closure comes against the backdrop of broader reforms to from complex, illiquid securities. The on mass-marketing speculative mini-bonds in December 2020, following scandals at London Capital & Finance and elsewhere. The agency has since tightened the rules for for unregulated issuers, introducing a gateway system in 2024 that requires specific permission and competence checks.
Wellesley & Co was barred from promoting new investments in 2020 and entered administration in April this year. Joint administrators from RSM UK are now overviewing the wind-down. Related group entities had already fallen into administration earlier in 2025.
For investors, the case closes without compensation beyond what the CVA already returned. For the FCA, it underscores how hard it is to pursue enforcement once risks have been disclosed on paper, even if outcomes are grim.
As Chambers put it, the regulator’s forensic work found disclosure, not deception. The money lost by thousands of ordinary savers now stands as a reminder of the dangers that drew the FCA to rewrite the rulebook on mini-bonds.
