Big GPB fund reports — finally — and posts revenue and income growth

After the partnership missed its deadline to file audited financial statements in 2018 for its two largest private funds, the entire GPB enterprise struggled.

After years of delays and any number of hurdles, GPB Capital Holdings Inc. has delivered financial statements to its investors for one of its largest funds and reported recent revenue and income growth in the fund.

Last Friday, GPB Holdings II filed its registration statement, including its audited financials, with the Securities and Exchange Commission; the partnership, which raised $645.8 million from investors in its private placements, is four years late in delivering financial statements.

Net income at the partnership, which was sold to investors in $50,000 and $100,000 private placements by dozens of broker-dealers, climbed to $166.3 million last year from a loss of $28.3 million in 2019, according to the registration filing with the SEC. Over the same period, total revenues for GPB Holdings II increased 37.5% to $153.4 million.

GPB raised $1.8 billion from investors through sales of private partnerships starting in 2013, but it hasn’t paid investors steady returns, called distributions, since 2018. More than 60 broker-dealers partnered with GPB to sell the private placements and charged clients commissions of up to 8%.

After missing its deadline to file audited financial statements in 2018 for its two largest private funds, including GPB Holdings II, the entire GPB enterprise struggled, cutting dividends for some private placements and facing multiple investigations and lawsuits. Last year, it was charged with civil fraud by the SEC. Former GPB senior executives also face fraud charges.

Meanwhile, the company told investors in a letter Monday that there were no immediate plans to pay distributions, which are akin to dividend payments on certain private investments.

“The audited financial statements reflect a strong portfolio with significant cash and liquidity, and minimal long-term debt,” Rob Chmiel, GPB’s CEO, said in a statement. “We continue to evaluate strategic options for how to best maximize value for our investors.”

The filing confirmed net assets of close to $567.3 million in GPB Holdings II at the end of last year.

GPB Capital is in the process of shedding assets. In December, it sold Alliance Physical Therapy Partners for a net proceed of about $119.0 million, or close to twice the multiple on invested capital, the company said. In November, it sold its auto dealerships, operated under Prime Automotive Group, resulting in net proceeds of almost $281.8 million. And last month, GPB sold a 30-acre parcel of land in New Jersey that reportedly had been valued at $78.3 million.