Velocis Fund III Losses?

Soreide Law Group is investigating potential investor claims involving losses in Velocis Fund III, a private real estate fund that has reportedly generated significant losses for some investors. Velocis Fund III was offered as an alternative investment focused on acquiring, improving, and managing commercial real estate assets in selected regions of the United States.

Because the investment involved substantial risk, limited liquidity, and a long-term investment horizon, investors should understand concerns that have been raised regarding both the fund and the manner in which it may have been recommended to certain clients. The information below summarizes key facts about the offering and potential investor claims.

Overview

Velocis Fund III is a 2020 vintage value-added real estate fund managed by Velocis, a Dallas, Texas-based real estate investment firm. The fund was structured as a private limited partnership, domiciled in Delaware, and focused on investment opportunities throughout the Southeastern and Southwestern United States.

According to publicly available information, the fund targeted properties associated with the oil and gas and beauty industries while also investing in medical buildings, office properties, retail assets, and multifamily real estate. The fund reportedly raised approximately $298 million to $300 million in equity capital and is now closed to new investors.

Concerns About Velocis Fund III

As a private real estate fund, Velocis Fund III involved significant investment risk and limited liquidity, characteristics that generally make such offerings more suitable for investors who can tolerate long holding periods and the possibility of substantial losses. Because interests in the fund were not publicly traded, investors generally had limited opportunities to liquidate their positions before the fund's investment cycle was completed.

Reports indicate that some investors have experienced losses in Velocis Fund III. Concerns have also been raised that certain investors may not have fully understood the investment's risks, fees, liquidity restrictions, and long-term holding requirements before purchasing interests in the fund. Questions have additionally been raised regarding whether some retail investors, retirees, and conservative investors were appropriate candidates for a speculative private real estate investment.

Potential Sales Practice Violations

The issues with Velocis Fund III extend beyond investment performance. Securities brokers or financial advisors may have made unsuitable recommendations, misrepresentations and omissions concerning risk and liquidity, failure to adequately disclose fees and commissions, violations of Regulation Best Interest, and failure to properly supervise the sale of the product.

Because private placement real estate funds are complex and illiquid investments, financial advisors are generally expected to conduct reasonable due diligence and determine whether the investment is appropriate for a client's objectives, risk tolerance, financial condition, and liquidity needs. There are also concerns that compensation generated by brokers or advisors from selling private placement investments may have influenced recommendations made to certain clients. Investors who suffered losses may have legal remedies available, including pursuing claims through FINRA arbitration to seek recovery of investment-related damages.

Did You Sustain Losses Investing In Velocis Fund III?

Did you experience losses as a result of investing in Velocis Fund III LP based on a recommendation from your financial advisor or securities broker? You should contact Soreide Law Group at (888) 760-6552 or online and speak to a securities attorney about a possible recovery of your investment losses. Soreide Law Group has recovered losses for hundreds of investors throughout the country. The firm works on a contingency fee arrangement and advances all costs. A review of your account may help determine whether Velocis Fund III was suitable for your investment profile and whether risks, fees, and liquidity restrictions were adequately disclosed before the recommendation was made.