Published: 10:38, 18 September 2019
| Updated: 11:36, 18 September 2019
Ambitious plans by the operators of Dreamland to buy the theme park have been thrown into doubt after the hedge fund which backs it shut down.
Sands Heritage Limited (SHL) has been planning to buy the site from Thanet District Council (TDC) for several months.
The history of Dreamland
A spokesman for Dreamland says operations will not be affected adding "it is business as usual" but the lack of financial backing from its investors throws serious doubt on whether it will be able to purchase the site and carry out its future plans which include a 120-bedroom hotel on Margate seafront.
In a statement, the company said: "Arrowgrass has confirmed that the divestment process will be focused on obtaining appropriate value for investors over time. SHL is and will remain in regular contact with Arrowgrass throughout this process.
"Arrowgrass was instrumental in funding phase 1 of Dreamland’s development, investing in new rides and in the transformation of the park.
"Dreamland has had its busiest year to date and SHL is excited to be entering phase 2 of Dreamland’s continued growth strategy to create a varied accommodation offering in Margate and a 365 day event business for Dreamland."
When asked by KentOnline how the park plans to progress its development without confirmed funding streams and investment from its backers, the company said it would not be commenting.
But SHL's financial backers Arrowgrass - which employs 100 people in offices in London and New York and managed almost $6.5 billion worth of assets just two years ago - has announced it will close.
The investment management firm said in a letter to investors the company could not identify "a near term catalyst that would signal the end of the current cycle" as central banks around the world launch a new round of quantitative easing, American business publication Bloomberg reported.
The closure of the Arrowgrass fund was also confirmed in a statement by one of the company's subsidiaries, TruFin, last week.
Sands Heritage Limited - the operators is Dreamland - is owned by Margate Estates, of which Arrowgrass is an investor.
The council still owns the freehold of the site.
But fears have been raised about the long-term future of the site if SHL is unable to continue operating.
Negotiations between the council and SHL were close to reaching a conclusion with a final valuation of the site due to be finalised.
The decision to sell to SHL was called in for scrutiny by opposition councillors to avoid "a Del Boy deal" being pushed through and hitting taxpayers.
Demands included providing three valuations instead of just one initially suggested by TDC which was initially rejected but seeking a second valuation was agreed by cabinet members last week.
Arrowgrass formed in 2008 set up by a group of former Deutsche Bank traders and recorded a 2.5% fall up to August 23 and single-figure returns since 2016.