Cru denies staff cuts have affected suspension response

Cru has denied that reduced staff levels are affecting its ability to handle the suspension of the Arch Cru fund range.

‘We believe our structure and reduced staff levels are sufficiently skilled to mobilise IFAs and liaise with Arch and Capita, we welcome the support of IFAs in ensuring that we continue to meet investor expectations,’ managing director Marc Ainscough has said in a statement.

‘Any suggestion that the resources and skills being deployed to this role are insufficient or that any proposed redundancies of sales staff may prejudice this are firmly rejected.’

Citywire revealed last week that Cru had been reduced to a staff of just two – Ainscough and operations director Anna Morgans.

Ainscough also urged Capita, the authorised corporate directors for the fund range, and fund managers Arch to communicate more with investors. 

‘We have asked Capita for an update as clearly the lack of communication by Capita and Arch, although understandable given the current position, is most unsettling for clients and advisers,’ said Aisncough.

He added that Cru's position was 'frustrated' by not being party to the decison-making process for the fund range's future, which lies in the hands of Capita, Arch and the Financial Services Authority.

Cru is now proposing that the Arch Cru fund range be restructured to create a more orderly market for redemptions and subscriptions. Ainscough has proposed that the funds should move to a monthly subscription basis. Redemptions would carry a three-month notice period, and would be limited to 5% of assets on each redemption date. All further redemptions would be pro-rata.

‘We believe there is a need to reduce the pressure to sell the funds’ assets, so as to ensure that liquidity issues do not keep re-emerging with the risk of ongoing suspensions,’ said Ainscough in a statement.

He pointed to the collapse in the secondary market for the assets making up the funds, and argued that unless demand for them re-emerges it would be dangerous to try and price them.

‘Unless liquidity can be created for the funds at fair value, there is the risk that quality assets will disappear into the numerous so called “vulture funds” that have been set up to take advantage of chronic illiquidity in asset markets,’ said Ainscough.