Cru on a knife edge as fund trail is blocked

Cru Investment Management’s future hangs in the balance after HSBC and BNY Mellon, custodians for the CF Arch Cru fund range, suspended fee payments from the funds, cutting off trail commission to advisers.

Cru’s bank accounts have been frozen and only managing director Marc Ainscough (pictured) now remains at the company. Ainscough said the future of the company depended on the custodians paying the accrued fees, which he said had been cut off over April, May and June.

Ainscough stressed that the custodians had not decided whether the accrued fees from the funds would eventually be paid or not.

He suggested that they may be waiting until the imminent results of an audit of the funds’ underlying assets.

In the meantime Capita has been forced to stop making trail commission payments, he said.

‘A number of IFAs have contacted me and are very concerned that Capita has not paid that revenue and the impact that has had on their businesses,’ said Ainscough.

A Capita spokeswoman said, ‘Given the current position of the funds CFM must carefully consider whether it is in the interests of investors to continue to allow the collection of charges out of the funds while they are in suspension.'

‘The issue is under active consideration and we will keep investors, Arch and IFAs informed of our decisions.’

The revelations are sure to raise questions about the ability of fund managers Arch Financial Products to recover investors’ money which was lent to Cru Investment Management (CIM).

The CF Arch Cru funds lent up to £3.2 million to CIM. It is not clear whether Cru has already repaid any money and Ainscough said he was ‘contractually bound’ not to release information on the loans.