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Arc Capital and Income sold to Merchant Capital

Structured product provider Arc Capital and Income has been sold to Merchant Capital.

In an update today, administrator Carter Backer Winter said it had successfully brokered the deal, preserving the interests of approximately 10,000 investors with investments totalling £100m.   

This deal ensures the continuity of the ACI business as all the funds under management will now be controlled by London-based corporate finance house and stockbroker Merchant Capital. ACI will be housed within the investment management arm of the firm and it is understood that a number of staff including director John Gracey will be transferring across with the business.

Joint administrator and partner John Alexander says: “This is excellent news for the 10,000 investors because effectively their investments (collectively worth around £100m) will be accessible virtually without interruption.” 

ACI arranged the underlying investments for its structured products with a range of different banks.  Three of the firm’s structured products which were backed by Lehman Brothers will not be transferring to the new business. These are the fixed income plan 6, the stepped kick out plan 5 and the bull & bear enhanced investment plan 3.

The marketing and distribution of these products, along with the wider structured products market, have been subject to a FSA review and it was these potential claims which led to the administration of the company.

The Financial Services Compensation Scheme is investigating whether it can accept claims for compensation from investors in these plans.

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