Cru admits re-opening of funds 'extremely unlikely'

Cru Investment Management has admitted that it is ‘extremely unlikely’ that the suspended Arch Cru fund range will re-open.

In an internal email seen by Citywire, operations director Anna Morgans said: ‘At this time we do not know the exact route forward that [fund administrators] Capita/FSA will undertake but it is extremely unlikely these funds will re-open for business.’

Investors will be unable to redeem their holdings if the Arch Cru range, which holds in the region of £400 million under management, is not re-opened, and will have to hope for an orderly sell-off of the underlying assets to recover funds.

Cru has now been reduced to a staff of just two as a result of the suspension, with only Morgans and managing director Marc Ainscough now remaining, according to the email sent on 18 March.

‘Our only option going forward is to collapse the business down to the bare necessities on an operational front to deal with purely the suspension issues,’ Morgans said in the email.

A number of former and current Cru directors have now moved across to the board of Africa Invest Fund Management (AIFM), which Cru non-executive chairman Jon Maguire chairs.

Contrary to Maguire’s claim in an email sent to investors on Tuesday that AIFM ‘has no operational connection’ with Cru other than his chairmanship of both firms, Citywire can reveal strong links between the two.

Documents filed to Companies House show that Morgans is also a director of AIFM. Duncan Parker, managing director of international development and distribution for AIFM is still listed as a Cru director. Tabitha Merrett is also a director having earlier served as a director at Cru. Clive Stanley Matthias is company secretary for both firms. AIFM and Cru are also both registered at 3 Callaghan Square, Cardiff.

Maguire said in Tuesday’s email that ‘Africa Invest has a board of directors who are not connected in any way with Cru’.

Strong financial ties also exist between Cru and the wider Africa Invest initiative. Africa Invest (Malawi), the business Maguire founded in Malawi, received a loan of £2.4 million from Cru. Cru auditors PricewaterhouseCoopers note in their report on Cru’s most recent accounts that there is ‘no formal agreement to confirm the terms of the repayment’. They added that although £1.5 million has been settled, there was ‘insufficient evidence’ of Cru’s ability to recover the outstanding £900,000.