Cru funds write off £23m Clubeasy debt

Up to £23.2 million owed to the suspended Arch Cru funds has been written off as part of a deal to sell student accommodation company Clubeasy Group, in which the funds were invested.

Spearpoint, manager of the funds’ underlying investments, has sold Clubeasy to a group of investors for a price thought to be around £10 million, to be paid over the next 24 months. As part of the deal it has written off the debt owed to the funds.

Calum Cameron (pictured), chief executive of Leicester-based Willow Financial Management, has client money in the funds and said he was concerned about how the assets were being sold off.

‘We have ongoing concerns about how the funds are being managed out over the next one to two years, with the fear that assets may be sold off at depressed prices,’ he said. ‘But we are more focused on the role of the parties involved in the original management.’

Sources close to Spearpoint have said it regards the deal as a success given Clubeasy’s financial difficulties when the fund manager took over the funds in December last year.

Garteh Fatchett, partner at law firm Regulatory Legal, which is representing advisers with clients in the Arch Cru funds, criticised former fund manager Arch Financial Products and authorised corporate director Capita over the investment in Clubeasy.

'To write off such significant sums of money on an investment which appears to be out of kilter with the published risk profile of the funds beg some serious questions,' he said.

But Capita said that as the Clubeasy investment was made by the Channel Islands-listed cells that made up the Arch Cru funds, it was not repsonsible for it.

'CFM [Capita Financial Managers] was not responsible for the investment decisions taken by Arch as investment adviser to the Guernsey cells, including the decision to invest in Clubeasy Group. Nor is it now responsible for investment decisions made by Spearpoint as the current investment adviser to the Guernsey cells, including the decision to dispose of this particular investment,' said a Capita spokeswoman.