The Du Val collapse: what happened, and what investors can learn

The Du Val collapse began in August 2024, when the High Court put Du Val Group entities into interim receivership on the FMA’s application. On 21 August 2024 about 70 entities went into statutory management. By September 2025 known debt stood at $268 million, and Mortgage Fund and Opportunity Fund investors were unlikely to benefit from recoveries.

Du Val was an Auckland developer of large residential projects that also raised money from wholesale investors, through a mortgage fund, build-to-rent partnerships and an opportunity fund. This article sets out the reported facts, drawn from the FMA, the Government and RNZ, and the lessons they hold for anyone investing outside the mainstream. Matters still under investigation are left to the investigators and the courts.

What was Du Val?

Du Val Group developed large-scale residential property in Auckland. By the time it failed, the group was made up of about 70 entities: four core companies, 46 subsidiaries and 20 special purpose limited partnerships.

Alongside its development business, Du Val offered investments to people it treated as wholesale investors. These included the Du Val Mortgage Fund Limited Partnership, build-to-rent partnerships (including developments at Māngere Bridge and Māngere East), and an Opportunity Fund. Wholesale offers carry lighter disclosure than offers to the public, because the law assumes the investor has the experience to assess the investment without a product disclosure statement.

That assumption sits at the heart of this story.

What is the Du Val timeline?

Sources: FMA Du Val case page, FMA statement on statutory management, RNZ, September 2024 and RNZ, September 2025.

What did the FMA warn about, and when?

The warnings came in three stages, each public.

Advertising, 2021. The FMA found that Du Val had promoted its Mortgage Fund as having “the best of both worlds”, with high security and a high return, and had compared it favourably with bank term deposits without a balanced view of the risks. It had also said there were “no fees”, while Du Val kept all profits above the fixed 10% return paid to investors, which the FMA treated as an undisclosed performance fee. The FMA noted that property development financing is inherently risky. FMA executive director Paul Gregory said Du Val “appeared to be using social media and other online channels to target less experienced investors”.

Eligible investor certificates, 2022. In October 2022 the FMA formally warned seven wholesale property firms, including Du Val Capital Partners and Du Val BTR GP, that certificates relied on to treat people as eligible investors were incomplete. Across the seven firms, it found grounds such as owning KiwiSaver, holding term deposits, owning rental property or making a profit on a house sale being accepted as investment experience.

Distributions, 2023. After the Mortgage Fund suspended cash distributions in January 2023, the FMA said investors had been misled about the reason for the suspension. It also said the proposal to turn distributions into extra units was not permitted under the limited partnership agreement, so investors were not obliged to accept it.

Why was Du Val placed in statutory management?

Statutory management is rarely used in New Zealand. Announcing it, Commerce and Consumer Affairs Minister Andrew Bayly called it “the option of last resort used to deal with complex corporate failure where ordinary insolvency law is inadequate”. The Government’s announcement put the number of investors, home buyers and lenders involved at 120 to 150.

The FMA said the conditions for statutory management under the Corporations (Investigation and Management) Act 1989 were met, and that its investigations into the group were continuing. The PwC partners who had been interim receivers since 2 August became the statutory managers.

What have Du Val investors recovered?

The first figures, reported in September 2024, put the total owed at nearly $240 million: $196.4 million to creditors and $41.2 million to investors. By March 2025 known debt had been put at $306 million, and by September 2025 it had come down to $268 million.

The fall came mainly from property sales. RNZ reported that the build-to-rent developments at Māngere Bridge and Māngere East sold for about $31 million, that China Construction Bank was repaid $18 million, and that build-to-rent investors could receive 40 to 44 cents in the dollar within three months. Investors in the Mortgage Fund and the Opportunity Fund were described as unlikely to benefit.

RNZ also reported the statutory managers’ view that the group’s accounting records were “materially incomplete, with a large volume of related party transactions”, and that forensic work was continuing.

The contrast between investor groups is the most instructive part. Who gets paid in a collapse depends on where you sit in the queue, and on whether your claim is tied to a specific asset or to a vehicle inside a larger group.

What are the lessons for investors?

Regulators can warn, but they cannot do your due diligence for you. In July 2025 the High Court struck out an investor’s claim that the FMA owed duties of care to individual investors. Seven lessons stand out.

1. Read how the manager is paid. “No fees” meant little when the manager kept everything above a fixed return. Ask what the borrower pays and what the manager keeps.
2. Ask what the money is lent against. Development finance depends on a project being finished and sold. That is a different risk from a loan over an existing, occupied property.
3. Treat term deposit comparisons as a warning. The FMA required Du Val to stop comparing its fund with bank deposits. Any return well above bank rates comes with more risk; the question is whether you can see it.
4. Take the wholesale process seriously. Signing an eligible investor certificate means giving up the protections of a regulated offer. An offeror that accepts thin grounds is showing you how carefully it follows the rules. Our guide to the eligible investor certificate explains what a proper one involves.
5. Watch the distributions. The Mortgage Fund suspended cash distributions about 19 months before the interim receivership.
6. Understand the group. Seventy entities is a structure few investors could see into. Related-party dealings are hard to spot from outside a group, which is why a direct look at the asset matters.
7. Know whose name is on the security. A unit in a fund is a claim on the fund. A registered mortgage in your own name is a claim on a specific property.

How does a named, loan-by-loan position differ?

Du Val’s investors held interests in vehicles inside a developer’s group. The alternative is to hold a registered share of one loan you chose, over one property you can identify, with no development risk.

HomeSec Business Finance, a private business lender lending since 2004, with its New Zealand office in Auckland, works this way. It funds most of its loans from its own balance sheet and on some loans invites wholesale investors to co-fund alongside it.

Every loan passes a 50-point due diligence checklist before its pack reaches you, and you can still say no. Loans typically run 1 to 12 months, up to NZ$1 million, with a maximum 80% LVR on residential property and lower on commercial. The steps are set out in how it works.

None of this removes risk. A borrower can default, and a sale takes time. If that happens, the mortgage is enforceable under the Property Law Act 2007, starting with a default notice of not less than 20 working days, and HomeSec manages the process with specialist lawyers, with its own money in the same loan. The full picture is in risks and protections. Du Val was not the first New Zealand collapse of its kind; the earlier wave is covered in New Zealand’s finance company collapses.

What is the one question to ask?

Ask what you will actually own, and whether you can check it yourself. If the answer is “units in a fund” and “a newsletter”, you are relying on the manager for everything. If it is “a share of this loan, over this property, in my name”, you can verify it on the title.

If you’d like to see what that looks like on a real loan, register your interest and our Funding Manager will be in touch.