On 18 June 2018, the long running case of Al Sadik -v- Investcorp Bank BSC and others1 reached its conclusion in the Privy Council. Investment Managers will welcome the Privy Council’s dismissal of the appeal by Mr. Al Sadik. The Privy Council found that the Cayman Islands Court of Appeal and Grand Court both correctly decided that the Share Purchase Agreement (“SPA”) authorised Investcorp Bank BSC (“Investcorp”) (and its related entities) to leverage Mr. Al Sadik’s investments and take administrative steps in furtherance of that goal, including transferring Mr. Al Sadik’s funds to a special purpose vehicle (“SPV”), Blossom IAM Ltd (“Blossom”).
Leveraging an investment is a common way to increase an investor’s potential returns. Instead of solely relying on the investor’s own funds, borrowed funds are also used to increase the size of investment and thereby increase the size of the potential return. However, any losses on the underlying investment will also be increased.
There are a number of ways to leverage an investment through an investment fund. For example:
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The Privy Council Exercises its Leverage to Dismiss the Appeal in: Al Sadik -v- Investcorp Bank BSC and Others
1  UKPC 15.