Cru admits re-opening of funds 'extremely unlikely'

In an internal email to staff sent in December last year, Maguire said that he set up his new Africa agricultural fund outside of Cru to protect it from any ‘domino effect’ from a failure of the Cru funds. The fund, which will be promoted to UK investors during a series of roadshows in April and May, is part of AIFM, which was incorporated in the UK in April last year according to Companies House documents. This is a separate company from those that house Africa Invest initiatives led by Maguire to date.

‘The best way to develop Africa is to establish the Africa Fund outside of Cru,’ Maguire told staff. ‘This prevents any domino effect that could take place if anything happened to our mainstream CF Arch cru Funds beyond our control.’

‘Under this scenario, if the Arch Funds fail, Cru does not need to. If Africa fails, Cru does not need to. By so doing, I am trying to maintain maximum security of employment for all cru staff and Africa,' he said.

Africa Invest operations to date come under a ‘cell’ company, managed by Arch Financial Products and listed on the Channel Islands stock exchange, and has total assets at £7.3 million according to unaudited financial statements for the period up to 30 September 2008.

Related to this ‘cell’ is UK company Africa Invest, where Maguire is also a director, as is Arch Financial Products managing partner Robin Farrell. Maguire is also a director of Africa Invest Contracting. Morgans is  listed as a director of Africa Invest Contracting, while Merrett has also previously served as a director. Clive Stanley Matthias is also the secretary for both these firms.

Cru managing director Marc Ainscough said, 'Given the current market and economic climate, and the growing trend of funds being gated and suspended, it is hardly surprising our concern as to the future direction of Cru and the funds themselves. At present, there isn't a viable Arch Cru fund to market and it would have been irresponsible of us not to have addressed our staffing levels. If with IFA support we can achieve a re-opening, Cru can easily rebuild.'

'The support for the continued availability of the funds has been overwhelming,' he said pointing to the results of the IFA survey Cru have been conducted which he said showed 97% wants the funds re-opened.

'We appreciate that a number IFAs will have reservations about supporting the funds going forward unless they have greater clarity and assurances on the nature of underlying holdings, valuation policy and how liquidity could be managed in the future. We believe that Arch is now taking steps to address these investor concerns,' said Ainscough.