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Keydata structured product book sold to Merchant Capital
by Iain Martin on Apr 27, 2010 at 13:14
Keydata Investment Services administrator PricewaterhouseCooper (PwC) has sold its back book of structured products to Merchant Capital.
Merchant Capital has bought around £191 million of structured product held by 14,500 investors from PwC. Merchant Capital launched its own structured product arm in January after buying failed provider Arch Capital and Income in November.
‘We are in the process of transferring them across…but there is still dotting of Is and crossing of Ts,’ said a spokeswoman for PwC. Merchant Capital was unavailable for comment.
The book bought by Merchant Capital contains Keydata structured products backed by blue chip financial institutions.
Keydata managed around £3 billion of assets held in its own and third party structured products before it was pushed into administration in June 2009. Administrator PwC has tried to sell the Keydata structured product book on several occasions with Meteor Asset Management the most recent bidder.
The Keydata structured products have not been engulfed in the problems affecting life settlement-backed savings plans marketed and sold by Keydata.
The Financial Services Compensation Scheme has begun compensating many consumers who bought SLS Capital-backed plans but Lifemark investors are still waiting for details of a restructuring deal to emerge.
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2 comments so far. Why not have your say?
baffled ..
Apr 27, 2010 at 20:50
Well that's okay then. The administrators managed to find a company that the FSA thought was the ideal company to restore confidence amongst investors and advisers !
Maybe not.
In fact, the FSA knows certain staff in Merchant Capital very well .... because they put their last company out of business only last year, ie ARC?!
It's really quite farcical that a company borne out of one of the companies that was put out of business by the regulator last year is this year, just months later, sanctioned to take over one of the other companies put out of business by the regulator last year. Especially as as the company put out of business last years was also borne out of a company with a history at the centre of precipice bonds debacle many years ago - ie Nvesta and Euroilfe.
In fact, if investors knew the background of the people involved in running certain firms in the past most wouldn't choose to invest.
For instance, both ARC (which bought the assets) and Meteor (director(s)) were borne out of Nvesta, that was put into administration in 2004 - KPMG were the administrators that time ! - after precipice bond related problems, which was borne out of EuroLife (which sunk as a brand after being at the forefront of precipice bonds). Infact, think it through and ARC presumably flogged Lehman backed plans to investors who'd previously bought precipice bonds off Nvesta. It seems the FSA thinks that's such an impressive background that they'd like to give Merchant Capital and these individuals a go at an even wider investor base now.
By the way, check Merchant Capital's own description of themselves out and they detail the assets that they've acquired and their previous trackrecord as a team as if they demonstrate a proven track record in the structured products industry - whilst failing to state that these 'assets', ie previous plans, were issued by not just one, but two, if not three, companies that were put out of business. Surely that is blatantly unfair and misleading?!
Anyway, investors and advisers can now sleep at night confident that the best possible company has taken over Keydata's structured products business!!
Until the next mess!
report thisBucky Lasted
May 11, 2010 at 10:24
baffled
As a matter of interest which people in Meteor were with Envesta/Eurolife?
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