Home Long Income Fund v Knight Frank Llp [2025] EWHC 1345 (Comm) (03 June 2025)

Executive Summary

The case involves Home Long Income Fund ("the Fund") suing Knight Frank LLP ("Knight Frank") over alleged misvaluation of property assets.
The Fund, managed by Alvarium Fund Managers (UK) Limited ("Alvarium"), claims Knight Frank’s valuations overstated property values, contributing to a 61% NAV decline from Q2 2022 to Q2 2023.
The Fund’s management has been under FCA investigation since February 2024, with Alvarium’s appointment as Authorised Corporate Director ("ACD") terminated and replacement delayed until June 2025.
The Investor Group, holding 98% of the Fund, initiated claims against Knight Frank, alleging negligence, procuring breach of contract, and unlawful means conspiracy.
Knight Frank seeks to strike out the claim, arguing the Fund was not in a position to formulate claims when proceedings began and that serious allegations lack evidential basis.

No direct sanctions imposed in this case.
FCA regulatory restrictions on the Fund since April 2024 reflect regulatory pressure and potential indirect sanctions risk.
The Fund’s governance issues and FCA scrutiny may trigger future regulatory sanctions or enforcement actions impacting involved parties.

Prolonged management vacuum due to delayed ACD replacement increases operational and governance risks for the Fund.
Potential reputational damage to Knight Frank and Alvarium amid allegations of mismanagement and valuation inaccuracies.
Legal risks for Knight Frank from claims of negligence and conspiracy, despite strike-out attempts.
Investor unrest and litigation may destabilize the Fund’s asset management and valuation processes further.

The case is situated within the UK’s legal and regulatory framework, highlighting the FCA’s active role in overseeing investment funds.
Reflects UK’s stringent regulatory environment for financial services and real estate valuation standards.
Potential precedent for UK courts on claims involving valuation duties and regulatory compliance in investment funds.
Investor activism within UK funds signals increased scrutiny on fund managers and service providers.

The Fund’s NAV and gross property values declined sharply (~60%) over one year, indicating significant asset devaluation.
Overstated valuations may have misled investors, affecting capital flows and confidence in UK real estate funds.
The dispute may impact Knight Frank’s valuation business and client trust, with potential financial consequences.
FCA restrictions and ongoing investigations may affect the Fund’s liquidity and investor redemption capacity.

Monitor FCA investigations and regulatory developments closely for potential sanctions or enforcement outcomes.
Assess Knight Frank’s exposure to litigation and reputational risk; consider proactive risk mitigation and communication strategies.
Investors should seek enhanced transparency and governance reforms within the Fund to restore confidence.
Legal teams should prepare for protracted litigation given the complex governance and evidential issues.
Consider impact on valuation practices industry-wide; reinforce compliance with COLL and FCA valuation standards.

---

**Source Notes:**

Case Title: *Home Long Income Fund v Knight Frank LLP* [2025] EWHC 1345 (Comm)

Link: https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/1345.txt