US hedge fund Baupost Group is suing the new owner of part of London’s troubled Royal Albert Dock development, a scheme once seen as symbolic of deepening UK-China ties.
In a claim filed in London’s High Court this month, Baupost alleges that DPK Management, controlled by British property developer and amateur racehorse jockey David Maxwell, reneged on a deal to acquire the assets together.
The riverfront development in the east of London was previously owned by China’s ABP Group, which had planned a huge £1.7bn regeneration project to rival the city’s Canary Wharf financial centre.
In 2015, Xi Jinping, the Chinese president, and David Cameron, then British prime minister, gave their public backing to the project. It collapsed into insolvency last year, and much of the initial 565,000 square feet of office and retail space lies empty.
Maxwell, 44, emerged as the buyer of the completed first phase of the project through DPK earlier this year. PwC had run the sales process.
Baupost, run by Seth Klarman, alleged in the claim that it had “introduced” DPK to the opportunity of buying parts of the Royal Albert Dock development in February 2022.
The $30bn hedge fund claimed it had made an oral agreement on a joint venture with DPK at a September 2022 meeting in Lisbon, Portugal, between Maxwell and a Baupost managing director called Scott Dunn.
The alleged deal involved Baupost providing 95 per cent of the capital for the joint venture with DPK responsible for the remainder. Baupost brought the lawsuit alongside a Luxembourg entity it said was intended as the joint venture vehicle.
Baupost claimed that Maxwell also confirmed in an email that it would have the exclusive right to do the deal with DPK.
“After securing the right to purchase a first package of [Royal Albert Dock] property assets with the essential assistance and support of [Baupost], [DPK] has evinced a clear intention to break the agreement . . . by excluding the Claimants from the [Royal Albert Dock] investment,” the filing alleged.
Baupost declined to comment. Law firm Paul Hastings, which is representing DPK in the litigation, also declined to comment.
The companies have worked on previous property deals together, including an investment in a portfolio of UK car showrooms, according to the claim. The short filing gave only an overview of Baupost’s allegations.
Baupost said in the filing that it had “provided assurances of financial support necessary to facilitate [DPK’s] investment in [Royal Albert Dock] assets” and had also incurred “legal and other costs”. The lawsuit seeks as-yet unquantified damages for breach of contract, among other claims.
Additional reporting by Ortenca Aliaj in New York