Investor Concerns Rise Over £2.5 Billion Collapse of MFS

The collapse of Mayfair-based mortgage lender Market Financial Solutions (MFS) has raised significant alarm among investors as more than £2.5 billion of capital is believed to be at risk. The fallout from this incident is not limited to institutional investors; retail clients may also be facing exposure. This situation has entangled several prominent names in global finance, amplifying concerns about the broader implications for the private credit sector.

In a statement released on February 27, Apollo revealed that its Atlas arm had £400 million invested in MFS. Similarly, TPG, formerly known as Texas Pacific Group, disclosed an exposure of £44 million. Barclays, which reportedly has around £600 million linked to MFS, experienced a 4.2 percent drop in shares as investor unease mounted.

The situation escalated when two institutional creditors, Zircon Bridging and Amber Bridging, claimed a potential shortfall of £930 million against their £1.2 billion investment in MFS. Court documents indicate that MFS allegedly engaged in “double pledging” of the same property assets as collateral for various loans. Administrators from AlixPartners have raised these accusations in filings made to the chief insolvency and companies court.

Institutional investors, including Barclays, Apollo, and Wells Fargo, are reported to have funneled funds through special-purpose vehicles known as “warehouses.” These funds were intended to support bridging loans and buy-to-let mortgages sourced by MFS, which also operated under the name Loans Arena. MFS was responsible for managing repayments on these loans.

Investors’ concerns reportedly intensified when key collateral documents could not be located. Sources suggest that the absence of paperwork related to secured assets triggered alarm, leading to Barclays withdrawing routine banking services to MFS. This withdrawal resulted in the insolvency of Amber and Zircon, which then initiated proceedings that forced MFS into administration.

Retail investors may also suffer losses, as MFS marketed investment opportunities claiming high returns from bridging finance and buy-to-let mortgages. Reports indicate that some individuals may have invested their “life savings” into MFS structures, though it remains unclear which specific entities within the MFS group these clients are associated with.

According to the Financial Conduct Authority, MFS (UK) ceased to be authorized for regulated activities on February 13, 2026. The regulator stated that it was unable to comment on individual cases but emphasized that combating financial crime is a priority. Questions are emerging about the extent of regulatory oversight beyond anti-money laundering supervision.

Attention is also focused on Paresh Raja, the founder of MFS. Court counsel for Zircon and Amber have alleged that Raja fled to Dubai, as reported by debt publication 9fin. Raja, known in London’s business and property circles, had cultivated a profile as a supporter of buy-to-let landlords and a finance commentator. His LinkedIn profile boasts of building “a robust network of investors, banks, hedge funds, family offices, and international institutions.”

Fresh allegations regarding potential links to a corruption investigation in Bangladesh have also emerged. Sources indicate that former land minister Saifuzzaman Chowdhury is alleged to have utilized MFS in numerous property transactions, which are now under a freezing order by the National Crime Agency. The exact relationship between these transactions and MFS’s collapse remains unclear.

Currently, administrators are investigating documents and digital assets at MFS’s headquarters on Hertford Street, near Park Lane. In such cases, any suspicion of wrongdoing could lead to a suspicious activity report being filed with relevant regulators.

This scandal adds to existing unease in the private credit market, which has already been shaken by several high-profile defaults in the United States. Jamie Dimon, CEO of JP Morgan, previously warned that more “cockroaches” could emerge in the sector, hinting at further potential issues.

Just two months before the collapse, MFS management and staff celebrated at a black-tie Christmas party at The Peninsula London hotel, highlighting the dramatic shift in circumstances. As the situation unfolds, the full extent of losses and the responsibility for them remains uncertain.