Capita Financial Managers has admitted there is “significant difficulty and uncertainty” in assessing the value of up to 75 per cent of the £149m-worth of assets held in Arch cru funds.
Last week, Capita, the authorised corporate director of the CF Arch cru funds, published its annual accounts to the end of March. The accounts state the fair value of the underlying cells of the funds cannot be reliably measured, with assessments on value often based on unaudited information and changes in market conditions having an impact on recoverable amounts.
The accounts for the CF Arch cru investment funds, including the CF Arch cru investment portfolio and the CF Arch cru specialist portfolio, say: “These circumstances give rise to significant difficulty and uncertainty in ascertaining the recoverable amounts of the cell’s investments carried at cost less impairment. In respect of investment assets carried in the balance sheet of the company of £113m, there is uncertainty over about 75 per cent of the value.”
Capita also says there is uncertainty over 70 per cent of the value of the £36m held in Arch cru diversified funds, including the CF Arch cru global growth fund, the CF Arch cru balanced fund, the CF Arch cru income fund, and the CF Arch cru finance fund.
The FSA agreed a £54m compensation package with Capita, BNY Mellon Trust & Depositary and HSBC in June, which the FSA estimates will return around 70 per cent of the net asset value of funds when the range was suspended in March 2009, when combined with distributions already made and remaining assets.
Two judicial reviews have been launched challenging the terms of the compensation package, one by Justice in Financial Services on behalf of IFA Coull Money and the other by law firm Regulatory Legal on behalf of 2,700 investors.
Axxis Financial Planning director Owen Wintersgill says: “This supports the need for a judicial review, given the unknown true value of the fund and the extent of the liabilities.”