Merchant Capital acquires Keydata book
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Merchant Capital has confirmed today that it has taken on Keydata’s structured product book and residual third party administration.
The Keydata plans which exclude products embroiled in Lifemark, SLS and Hometrak were sold to Merchant Capital at close of business on April 23.
Merchant Capital takes on the responsibility for the management of plans including the processing of income payments from May, surrenders and maturities.
It will manage all the blue chip backed structured products issued by Keydata and Dawnay Day Quantum together with some products issued by a small number of independent plan managers.
Under the new arrangment, administration of client plans will now be undertaken by Pritchard Stockbrokers.
Enquiries from investors concerning the transfer of Keydata’s book should be directed to Merchant Capital from April 27 although Keydata will be responsible for income payments until the end of the month.
Merchant Capital says there may be a short period where any surrender requests, ad hoc valuation requests or requests for any other changes may be subject to a short delay as information is double-checked. It has advised Keydata clients that maturity payments for three Keydata managed plans due to mature during the last week of April will also be subject to a short delay while the details of investors are verified but assures clients that their investments are not at risk.
Merchant Capital will be writing to IFAs and all planholders advising them of the change in the on-going administration of their plans as soon as possible after completion of the transfer.
In March, Meteor Asset Management withdrew its bid for Keydata’s investment book which originally totalled £180m and associated admin. It was the front-runner to buy the book as well as some third-party admin business but talks with administrator PricewaterhouseCoopers broke down. Money Marketing reported that Merchant Capital was understood to be in discussions with PwC regarding a possible deal.
ACI was put into administration last October following compliance errors made by the firm in relation to Lehman product promotional material. The firm was sold onto Merchant Capital in November.
The Financial Services Compensation Scheme is still investigating whether it can accept claims for compensation from investors in ACI’s Lehman backed plans.
A Merchant Capital spokesman says: “Merchant Capital is delighted to be taking on the Keydata structured product book and is looking forward to working with clients who hold Keydata managed products and their advisers in the future.”
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Readers' comments (4)
Anonymous | 27 Apr 2010 12:58 pm
Well that's okay then. The administrators managed to find a company that the FSA thought was the ideal company to restore confidence amongst investors and advisers !
Maybe not.
In fact, the FSA knows certain staff in Merchant Capital because they put their last company out of business only last year, ie ARC?!
It's really quite farcical that a company borne out of one of the companies that was put out of business by the regulator last year is this year, just months later, sanctioned to take over one of the other companies put out of business by the regulator last year. Especially as as the company put out of business last years was also borne out of a company with a history at the centre of precipice bonds debacle many years ago - ie Nvesta and Euroilfe.
Impressive ! No doubt investors and advisers can now sleep at night confident that the best possible company has taken over Keydata's structured products business.
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Tony | 27 Apr 2010 4:15 pm
It seems to me that this is no more than asset stripping! Investors in Lifemark managed products have no hope now that the family silver has been sold off (hardly to the most suitable buyer either!).
The situation goes from bad to worse.
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Anonymous | 27 Apr 2010 6:48 pm
Your comments deserve a much wider audience on the basis that they factually accurate.I have to say that from a lower level of knowledge.the associations seem correct to me,and FSA should be brought to account to explain their actions.If they don't ,it makes a farce of their sanctions having any bite.
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anon | 27 Apr 2010 8:56 pm
I agree - these facts need a far wider audience.
If investors knew the background of the people involved in running certain firms in the past most wouldn't choose to invest.
For instance, both ARC (which bought the assets) and Meteor (director(s)) were borne out of Nvesta, that was put into administration in 2004 - KPMG were the administrators that time ! - after precipice bond related problems, which was borne out of EuroLife (which sunk as a brand after being at the forefront of precipice bonds).
Infact, think it through and ARC presumably flogged Lehman backed plans to investors who'd previously bought precipice bonds off Nvesta. It seems the FSA thinks that's such an impressive background that they'd like to give Merchant Capital and these individuals a go at an even wider investor base now.
By the way, check Merchant Capital's own description of themselves out and they detail the assets that they've acquired and their previous trackrecord as a team as if they demonstrate a proven track record in the structured products industry - whilst failing to state that these 'assets', ie previous plans, were issued by not just one, but two, if not three, companies that were put out of business. Surely that is blatantly unfair and misleading?!
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