ARCH Cru funds suspended due to liquidity problems
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The ARCH Cru fund range has been suspended after revealing a lack of liquidity to deal with redemptions.
In a statement on the group’s website, Arch Cru says that the move comes at the advice of Capita, which acts as authorised corporate director to the range.
Arch Cru has hit the headlines in recent months having continued to produce strong returns in difficult markets. The group has been heavily exposed to the likes of private equity and financials.
The suspension covers the entire range, which includes the income, balanced and finance funds.
A statement from the firm reads: “After consideration of all relevant circumstances relating to the Funds’ assets, we have, in conjunction with Arch Financial Products LLP, the delegated Investment Manager, come to the conclusion that current market conditions have led to the significant illiquidity of the assets of the Funds and in light of this we consider 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. 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 has also met to discuss how to protect advisers and investors from potential dangers to assets.
“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.”
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