Arch Cru fund range has been suspended

dunstonh

I know some of you here may have used the funds in question so may be interested in this article that has just flashed up.

http://www.citywire.co.uk/adviser/-/news/collective-investments/content.aspx?ID=332880&re=4928&ea=196312

ozzage

Was there any warning of this? I thought they were big, well-known and I certainly would have considered putting money into them. I haven't, though.

dunstonh

Was there any warning of this?

I dont think there was any warning as such but I know the research information given to us was to avoid using their funds due to the lack of transparency.

I thought they were big, well-known and I certainly would have considered putting money into them. I haven't, though.

I wouldnt say they are not that big in the retail markets. They became more well known because of the returns bucking the trend but they did smack of fashion investing when you started seeing the name being bandied around on the internet as it was.

turbobob

I did have a small amount in the Cru investment portfolio but got out a month or so back.

wombat42_2

Will investors get thier money back ?

turbobob

Who knows. This is what Cru are posting on their web site:

"CF Arch Cru Income Fund, CF Arch Cru Balanced Fund, CF Arch Cru Finance Fund, and CF Arch Cru Global Growth Fund (sub-funds of CF Arch Cru Diversified funds, an Investment Company with Variable Capital) (the “Funds”)

Capita Financial Managers Limited (“CFM”), as the Authorised Corporate Director of the Fund, has today obtained the agreement of the Funds' Depositary (which is responsible for the safe keeping of the assets of the Funds) to suspend dealing in shares in the Funds, with immediate effect and until further notice.

Arch Financial Products LLP is the delegated Investment Manager of the Funds. Two other funds of which we are the Authorised Corporate Director, and of which Arch Financial Products LLP is the delegated investment manager, announced on 13 March 2009, the suspension of dealing in shares of those funds. Those funds share similar underlying holdings with the Funds, although with different asset allocations. In addition, there is overlap between investors in those other funds.

We consider that the suspension of the other funds will lead to an increased likelihood of requests for the redemption of shares in the Funds. At the same time there is significant lack of market liquidity in the assets which comprise the Funds’ portfolios. We have therefore come to the conclusion that it is in the interests of all Shareholders in the Funds to suspend the issue, cancellation, sale, redemption and transfer of shares in the Funds.

During the period that share dealing is suspended no requests to redeem, purchase or transfer shares in the Funds will be accepted. In the event that CFM elects to resume dealing in the shares of the Funds, we will write to all Shareholders informing them of this fact.

We are currently reviewing the options for the Funds and we will keep all shareholders appropriately informed about the suspension, including its likely duration."

The cru Board met on the same day to consider what action we take to protect advisers and investors. Key to this is to prevent a fire sale of underlying assets of the funds because we believe this will create unnecessary losses to investors. We will discuss this with ARCH, Capita and the FSA and will advise you of the outcome as soon as possible.

Naturally we regret this development but we will work to ensure that investors are protected against a fire-sale of assets into a practically non-existent market. Capital markets are chasing liquidity and in this environment the value of assets, the value of almost anything, becomes deeply uncertain. We do not believe it is the time to be forced to sell assets to meet investors looking to exit the funds because those who remain potentially face a substantial and unnecessary loss as the result. This matter will be impressed on both Capita and the FSA.

grahameeasthope

Re the suspension of Arch Cru Funds, does anyone understand what happens now? Under what conditions will these funds be traded again? I have my pension in Arch Cru Funds. How much protection do we get from the FSA. As usual with finance, the statements are made in the media, on the web, but us layman can't understand what the technical jargon means. A bloke I spoke to at Capita, the fund managers, didn't seem to know much more either!!

Grahame