£54m payout for Arch Cru investors

21st Jun 2011 11:23

Scandal-hit CF Arch Cru funds and the administrator of these funds, The Capita Group, have agreed with the UK's financial regulator to pay £54m to the investors holding shares in the Arch Cru range of funds, ending a long awaited response from the regulator. The Financial Services Authority (FSA), which was conducting an investigation into the Arch Cru range of funds that have been suspended since 2009 due to lack of liquidity, said the agreement is a "fair and reasonable outcome" and is in the "best interests of investors."Under the terms of the agreement, Capital Financial Managers and the depositories BNY Mellon Trust & Depositary and HSBC Bank will voluntarily contribute towards the establishment of a £54m payment scheme, without admission to liability. The deal allows investors to recover approximately 70% of the net asset value of the Arch Cru funds at the date of suspension, 13 March 2009. Between 2006 and 2009, about £400m was invested in these funds. The funds, which invested heavily in private equity ventures and finance, claimed to provide investors with "absolute returns." AR