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JP Morgan deal will speed cash return to Arch cru clients

Arch cru investors should see part of their investment returned to them at a faster rate after JP Morgan Private Equity Limited announced it is acquiring some of the remaining fund assets in a deal worth £56.5m.

JP Morgan Private Equity Limited has entered into a conditional agreement with the board of cell companies that make up the Arch cru range to acquire a portfolio of 38 mid-market buyout co-investments.

The FSA recently announced a £54m package to compensate investors. It is hoped that the package, combined with the £64.1m of distributions already made to investors, and an estimated further £138.9m of distributions yet to be paid based on the remaining assets, will see around 70 per cent of net asset value of the Arch cru funds returned to investors.

Further deals of this nature are expected as the board of the cell companies looks to liquidate assets to fund investor distributions. When the FSA compensation deal was announced, it was estimated it would take three to five years to return all the residual assets to investors.

The cell funds have now written to shareholders to ask for approval for the deal.

The news comes a week after the board of the cell companies that make up the Arch cru funds prepares to launch a multi-million pound legal claim against Arch Financial Products over its management of the failed range.

As many as 20,000 people were invested in the CF Arch cru fund range when it was suspended on March 13, 2009.

Chelsea Financial Services managing director Darius McDermott says: “If this helps investors get their money back quicker it can only be a good thing.”


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