Capita will not be lifting the suspension of the funds, which have been frozen since March 2009 as it says the Guernsey-listed cells remain illiquid and this situation is unlikely to change in the foreseeable future.
The first distribution to investors is likely to take place in the first quarter of 2010.
The fund range has lost an estimated total of £140m, declining in value from approximately £363m at March 13 2009, to £223m in September 30 2009.
The largest of the funds, the investment portfolio has lost 41 per cent of its net asset value over this period, the income fund has lost 39 per cent, the global growth fund has lost 21 per cent and the remaining three funds have lost between 30 and 33 per cent each.
Capita is establishing a scheme to assist investors who are suffering “genuine financial hardship”.
Capita Fund Management has taken on the investment management of the funds from Arch Financial Products.
Capita Fund Management chief executive officer Chris Addenbrooke says: “CFM appreciates that shareholders may be concerned about the fall in the value of the cells. We continue to work closely with relevant parties to understand the reasons for, and timing of, this. In particular, we are pressing the cells and Arch, as investment manager of the cells, for an explanation of the reasons for the fall in value of the cells. We are also continuing to investigate whether the previously published NAVs of the cells were accurately reported in the period prior to 13 March 2009.”
Addenbrooke says Capita looked at a number of options with its specialist advisers, including the possibility of converting the funds into a closed ended investment vehicle, but it says this would not have been permitted by relevant legislation and FSA rules.
He says: “None of the other options would solve the fundamental issue of the lack of liquidity in the cells. CFM has therefore concluded that the option which is in the best interests of shareholders as a whole is an orderly realisation of the funds’ assets.”
Addenbrooke adds: “There will be no fire sale of the assets of the cells, as this would significantly reduce the return for shareholders. Equally, based on our review we believe that holding the assets of the cells to their maturity would not return substantially more to shareholders than an orderly realisation is expected to do.”