- Apollo confirms £400m exposure.
- Barclays shares fall 4.2 per cent amid £600m link.
- Allegations of double-pledged property assets surface in court.
The collapse of Mayfair-based mortgage lender Market Financial Solutions (MFS) is turning into one of the most troubling private credit stories to hit the City in recent years. More than £2.5 billion of investor money is believed to be tied up in the business, and it is now emerging that retail investors — not just institutions — could be exposed.
The unfolding MFS scandal has already drawn in some of the biggest names in global finance. Apollo confirmed on February 27 that its Atlas arm had £400 million invested in the lender. TPG, formerly Texas Pacific Group, disclosed exposure of £44 million. Barclays, which has reportedly around £600 million linked to the business, saw its shares drop 4.2 per cent as concerns intensified.
Behind the numbers lies a more serious allegation. Two institutional creditors — Zircon Bridging and Amber Bridging — claim there may be a £930 million shortfall on their £1.2 billion investment. Court documents suggest that the same property assets may have been pledged multiple times as collateral for different loans. Administrators from AlixPartners have accused MFS of “double pledging” assets, according to filings in the chief insolvency and companies court.
Billions in question, paperwork missing
Institutional investors including Barclays, Apollo, Jefferies and Wells Fargo are understood to have channelled funds through special-purpose vehicles known as “warehouses”. The money was meant to back bridging loans and buy-to-let mortgages sourced by MFS, which also traded as Loans Arena. MFS handled repayments.
But alarm bells reportedly began ringing when key collateral documents could not be located. One source said investors grew uneasy over the absence of paperwork tied to secured assets.
The immediate trigger appears to have been Barclays withdrawing routine banking services to MFS. After Barclays froze accounts, Amber and Zircon — themselves now insolvent — were pushed into insolvency. They in turn-initiated moves that forced MFS into administration.
Retail investors may also be in the firing line. MFS had marketed opportunities promising returns from “high-earning bridging finance and buy-to-let mortgages,” as quoted in a news report. One source claimed that some individuals may have placed “life savings” into the structure. It remains unclear which entity within the MFS group retail clients are linked to.
According to the Financial Conduct Authority register, MFS (UK) ceased to be authorised for regulated activities on February 13, 2026. The regulator said it was “unable to comment on individual cases” but added that fighting financial crime is a priority, as quoted in a news report. It is not yet clear how deeply regulatory oversight extended beyond anti-money laundering supervision.
Founder under scrutiny as international links surface
Attention has also turned to Paresh Raja, the founder of MFS. In court, counsel for Zircon and Amber reportedly alleged that Raja had “fled to Dubai”, according to debt publication 9fin. Raja, known in London’s Asian business and property circles, had built a public profile as a supporter of buy-to-let landlords and a commentator on finance.
On his LinkedIn page, he described building “a robust network of investors, banks, hedge funds, family offices, and international institutions,” reportedly stating that the business was well positioned for a growing client base.
Fresh questions have emerged over potential links to a corruption investigation in Bangladesh. Sources said former land minister Saifuzzaman Chowdhury is alleged to have used MFS in hundreds of property transactions. Those assets are now subject to a freezing order by the National Crime Agency. The precise connection between those transactions and the collapse remains unclear.
The administrators are now combing through documents and computers at MFS’s Hertford Street headquarters near Park Lane. As is standard in such cases, any suspicion of wrongdoing could result in a suspicious activity report being filed with regulators.
The scandal adds to wider jitters in the private credit market, already shaken by several high-profile defaults in the US. JP Morgan chief Jamie Dimon warned earlier that more “cockroaches” would emerge in the sector, reportedly suggesting further problems could surface.
Just two months before the collapse, MFS management and staff were celebrating at a black-tie Christmas party at The Peninsula London hotel. The contrast is hard to ignore.
For now, the scale of losses — and who ultimately bears them — remains uncertain.
