Arch pledges to reveal Cru funds' holdings

Arch Financial Products has pledged to disclose for the first time the names of some of the holdings of the Channel Islands listed cell companies that make up the Arch Cru fund range.

The move comes after Arch, fund managers for the Arch Cru fund range, had come under pressure from investors to provide greater levels of transparency over the funds’ underlying assets.

‘No doubt this pressing need is a response to some of the high-profile alleged frauds perpetuated elsewhere in the finance industry,’ Arch said in an update prepared for the investor committee, a grouping of advisers with client money in the funds that met yesterday.

‘On many levels, this response by investors is fully acknowledged and understood and we have embarked on a programme to consistently improve the information available to all investors.’

Arch will disclose ‘significant holdings’ for each of the cell companies in their monthly report to investors, and the Channel Islands stock exchange website from this month.

Each of the cell companies is also setting up its own website detailing strategy allocations, distribution of returns, geographical exposure and factsheets.

Previously some of the cell companies disclosed sample investments in their reports to the Channel Islands stock exchange, but no company names were given.

But Arch also warned that ‘too much exposure may be detrimental to the investment objectives’.

‘If we are lending at a high interest rate to borrowers who could get a better rate around the corner, it would hurt the fund if such borrowers were approached by other lenders,’ Arch said.

In the update for investors, Arch said that the impact on redemptions of the move by Fidelity FundsNetwork and Cofunds to suspend the Arch Cru funds on their platforms before the wider suspension by Capita, authorised corporate director for the funds, was unclear.