More important questions for Cru

A Ponzi scheme with a difference? Maybe such schemes which pay returns to investors from their own money or money paid by subsequent investors and then lends the proceeds to itself, should be called a "Maguire Scheme"

It will be interesting to hear some comments from those who sought to support Mr Maguire in the previous blog.

How many of these do you want to own upto Mr Maguire?

9 Do you not know that the wicked will not inherit the kingdom of God? Do not be deceived: Neither the sexually immoral nor idolaters nor adulterers nor male prostitutes nor homosexual offenders 10 nor thieves nor the greedy nor drunkards nor slanderers nor swindlers will inherit the kingdom of God.

I think that all that have an interest in the cru situation would agree that we need the answers to the questions that have kindly been provided by Citywire. Could we ask that either Mr. Maguire answers all points directly to this column or we have an adviser or two that can post the answers on this blog some time later today. I think we have all had enough of the chatter around Mr Maguire and cru and some honesty and disclosure is now required.

Firstly, should anybody be wondering about Richard's reference to Corinthians, what you should note is that it does not suggest any particular 'cul-de-sac' for one particular group out of plenty of others....

Other than that, surely we have no done this Cru thing to death on these pages?

I appreciate that now and again people get tired of repeatedly arguing over fees v commission and RDR qualifications and that another topic can be nice. But how many Cru related blogs have we had now? How many do we really need?

How independent is this investors committee?

It would seem questionable that Mr Danner is a major share holder in Cru and one can assume had knowledge of these loans. Also Kevan Ward is an ex employee of Cru.

As an investors committee, surely they will have to investigate Cru in light of these citywire findings and report accordingly.

From various reportings and press releases from Cru, it would appear that Maguire is distancing himself from any involvement and influence in the investment selection process and yet we have these loans.

How do these loans come about without any influence from Maguire? or do Arch just give the stuff away.

Bearing in mind these loans, there should also be questions raised around Africa Invest in respect of influence.

1). How much of a holding do the Funds hold in Africa Invest?

2). What was the decision process behind the investment and was Maguire party or an influence in the decision to invest?

3).As chairman of the investment committee for the funds, did Maguire make the committee aware of his personal interest in Africa Invest?

I see from the Arch website that the funds look likely to be suspended for a further period until 'at least the end of May'. Has this been confirmed by anyone?

This is the 20 something report surrounding this subject, it was interesting when the funds were launched, it was interesting when some advisers had doubts, then it was interesting when the funds had a problem, now it is just totally tiresome and frankly the Citywire Blog has gone downhill dramatically.

Bring back Richard Lander.

As an another adviser said, if this was a major fund such as Invesco or someone else important it would be worthy of this much exposure, but it isnt. This is about significant to our industry and the public as a corner shop closing is to the retail industry.

We have nothing else bad in our industry to report so this is on every other week. This a very visible site to the public, a fund problem reflects on the INDUSTRY AS A WHOLE, if this fund was important fair enough but it isnt.

Frankly I am thinking Gavin Lumsden is a pathetic little man who has some sort of stupid chip on his shoulder about this issue with no respect or understanding of our industry, we are going through tough times and we do not need tiny little issues like this ONE event written about fortnightly, weekly even at the moment.

There must be a bigger failure or problem in our industry than this tiny little insignificant happening. The public will assume that this is the tip of the iceburg or the start of soemething due to its exposure on this reputable site.

I am disgusted. There is one recognised adviser who has made a similar comment to me, we are back to the same couple of people posting under eric terry anon and so forth, what a heap of rubbish.

when will our industry stop being blinded by marketing. I attended many of Cru seminars

and met Mr Maguire several times.

I asked many tough questions and when I did not like the answers I did not recommend these funds at all . not one penny of my clients was invested.

Am I laughing now NO I am not , my business is not just to tell my clients where to invest, it is also about telling them where not to ? I should start to charge for that advice as well

Samir

Citywire need to be supported and congratulated on their efforts to investigate unethical behaviour in our industry.

Surely as a story unfolds, do citywire not have the responsibility to report the story? and when the information is given that is mis-leading, do Citywire not have the responsibility to report it?

I personally, (however yawn enducing) this or other stories may get, believe that it can only do our industry more good than damage, by exposing bad practice.

Gavin's question No 8 is an interesting one.

If Daniel's source is correct, Cru would appear to be enjoying a not insignificant income from the funds. I'm sure contractually Cru are entitled to the income, but it does raise the question of whether they are morally entitled to 100% of this income in light of recent reports. Whilst the funds remain active, Cru have a right to receive an income to cover its basic running cost and contractual liabilities, but income received in excess of these running costs should be returned to the fund and offset against any loans that have been made to Cru.

The investors committee should consider this to be beneficial to the fund whilst ensuring Cru are doing their utmost to help the investors.

As a person that suffered under the splits debacle and is still facing some of the flack from that, any advisors that used this fund after carrying out the correct due diligence have my sympathy. Those that didn't tough!

The trouble is that in our industry we trust the fund managers to do their job. We do what analysis we can of the funds, but how much can we consistently monitor the transactions of each individual fund in which our clients are invested.

We put fund managers on a pedestal in some respects and we expect them to deliver what they say on the tin. Consistent returns with low volatility, the ability to produce returns in both bull and bear markets etc etc.

Whilst this fund has its problems, lets be honest, how many fund managers have let us all down badly over the years. Invesco Perpetual European, Morgan Grenfell European, Exeter High Income Trust and countless others. What about the splits debacle, the incestuous relationship of the various providers. This is nothing new, it is just a twist on a theme played out over the years.

Good reliable fund managers are extremely hard to come by and their are many also rans out there. Our industry is geared round marketing, they need to keep the steady flow of money coming in to justify their jobs. They sell the sizzle not the sausage and will always tell you what the upside potential is and very little about the downside.

Look at the corporate bond marketing hype at the present time. Look at the property hype over the last few year, what about absolute return funds!!!!

No doubt the whole truth regarding the Cru funds will come out in due course but I personally think it is about time fund managers started carrying some responsibility for the fund performance and mediocrity that some, not all deliver.

Well-well! Maguire turning down the opportunity of media exposure.

Never mind, I'm sure he'll forgive your indiscretions, when he wants some media exposure for his African fund.

I don't usually watch Eastenders (I'm more of CSI man myself), but this is becoming more like a soap by the day.

As Bob D said "No doubt the whole truth regarding the Cru funds will come out in due course".

I for one would rather see some otehr reporting now and simply wait for the "Omnibus" in a month or twos time.

Why don't you just sit back for a while Gavin, this is getting far too much press for it's size.

I for one don't have a client with a penny in a Cru fund (unless they have done something behind my back!). Let's get back to something of interest to all and not just a view who used CRU

Jonathan

As ever you are the voice of reason, but for little people like me (Maguire-ese) I find the whole thing a laugh.

Why hammer Gavin?

Ian- being rude doesn’t reflect well on you and I can assure you that Gavin is far from pathetic and is not alone in brining this issue to a wider audience. Please refer to the leader in today’s Investment Week – (Page 32). As Rob Kingsbury so pithily put it “Half an hour of basic research on the internet would have created more questions than answers” – so what level of research and analysis did the 800 advisers who committed client money to this lunatic do?

It may be a small matter to some – but not to those who lost money. Not to the Regulator who failed yet again. Not to the fund management industry who didn’t see enough to clear up their own poo; not to the advisers who recommended the fund – who again demonstrate that there is a need for improved standards which ‘exams’ won’t necessarily achieve.

Lessons learnt are never a waste of time and we all can learn from events such as these. How many are now investing in Africa – even with ‘respectable’ fund managers? How much due diligence have they done? (Refer to my original blog with regard to corruption). Will the ‘professional bodies’ learn from this and adapt their syllabuses, so that investment papers can teach people to dig a bit deeper. (Bo – CII this is not a licence for yet ANOTHER Mickey Mouse exam).

Come on guys (and gals) – lets have a ‘be nice to Gavin week’.

Can someone clarify things for me regarding Cru etc.

Are there a number of advisers who moved their client's investments to Cru as a part of their " exit strategy " which will have embraced the " trail for life " offering and is this the critical aspect of their concern over the poor performance of a couple of funds amongst many,

There are a vast number of funds out there which have delivered returns far below their peers and yet they have not been subjected to this level of attention.

Is it investors who we are concerned about or rather advisers who fell for yet another get rich quick scheme ?

Have a long hard look in the mirror guys !

Hear Hear Harry - couldn't have put it better myself.

Ian you shoudln't descend to abuse - especially when you hide behind anonymity yourself.

Glad someone else feels the same and says it.

Harry, it is the sustained drawn out attention to this one group of funds which is annoying the hell out of me, what members of the public must think this is I do not know, it has had more airtime than Iceland. It has to be personal as there can be no other logical reason for all of this attention on something so unimportant.

We do not want these tiny funds problems giving the impression that our industry hasnt held up fantastically well in very difficult trading conditions.

Just out of interest- is anybody going to one of these lunch or Dinners?

Well said Harry. Exams will not and cannot be a substitute for experience. If one thing I learnt in my career, you have to always dig deep and ask questions.

In my 30 years I have seen a number of failed investment schemes .Sadly the people that get caught are those that can least afford it

Gavin is correct in pursuing this story. It will be the only way we will learn last week we had to pay an interim payment to the FSCS I am sure before this whole saga is finished we will have to dig deep in to our pockets either to pay the FSCS or increased cost of PI cover

I have read all the blogs on this subject and stayed out of most as I agree with many others that this has really outlasted itself as a subject requiring further discussion.

Dare I suggest that this should now pass as an issue to the FSA and be dealt with accordingly. If the fund is not as advertised or there was wrong doing by the management involved then sort it out legally once and for all and lets move on.

I must admit that the lack of decent discussion material has been evident in the last few weeks and the number of entries to comment on have been greatly reduced. I realise that "hobby horses" sometimes require riding until its end game but I would be grateful to see some diversification in subject matter and perhaps a little more thought in the discussion piece as we used to see on this blog some time back.

The upside to this is that I have got a lot of work done recently.

Yes, we were lied to by Jon Maguire, Robert Charlton, Arch and like but why? Why did we believe this “too good to be true” fund? Why didn’t we do more research into this bible bashing greedy lunatic?

I’ll tell you why; because we like his ideas surrounding private finance plus fees and commission, the marketing and his enthusiasm.

Yes this is small fry and yes we have spent enough time talking about cru and yes blame isn’t the way forward.

But if it stops Maguire making more foolish decisions with other peoples money and forces him to admit he’s wrong and finally brings in the FSA investigation I’d say it was worth it.

All other Blog has dropped to all time lows, Cru have banned Citywire from their meeting, what good is that??

Look at the fund sponsorship on this site, if the advisers start leaving and funds keep getting these levels of attention when it is bad news what is going to be the end result??

Plus we are individuals and businesses trying to make a living, I am ok with negative press about our industry but at a level which matches the relevance and importance in our industry, because the public read this site it isnt behind closed doors, they will see fund bad news each time they enter this site because the same negative story has been repeated between 20 and 30 times.

We are professional, this is supposed to be a professional site, lets talk about it, finish it and move on, when a massive story such as Equitable Life happens then fair enough, but come on over this??

What percentage of money invested will this be, 0.00000000001%?? Will it be that much?

It is one or two people keeping this fuel fired and I feel they have embarrased Citywire. This is one of my main sources of News and information, not the blog but the main section, if this is the new standard I am gone, Citywire are lucky, if they look at the blog numbers away from the strangers posting on here (Cru blog) they are down, so those people have left without saying anything, I would ask Richard Lander about his comments on the subject as he built this in to what it is.

You ranting and raving is what has likely put everyone off. People are asking relevant and genuine questions, I understand that to you it is insignificant and out of proportion with the rest of the economic problems but many IFA's have built their businesses around these Funds - it may have been foolish but this is the scenario and people need to know what has gone wrong.

If people have been outright lied to by cru and Arch and have not invested in what they were told they were investing in then this blog is necessary to try and get questions answered.

I agree though that it has become somewhat pointless with no responses from either parties involved and that it should be passed to the FSA to be investigated.

It is certainly true that funds from large and reputable groups have fallen significantly over the last year or so. To suggest that what has happened at Arch Cru isnt significant in comparison is surely to miss the point. If you invest money then losing it is just as much a part of the process as making a profit. The vast bulk of people in the industry are engaged in the honest pursuit of profits for their clients, even if they dont always succeed. Arch Cru shows all the signs of being different to this. It is just plain wrong to suggest that investigating possible wrongdoing is a waste of time and I would question the motives of anybody capable of uttering such rubbish. I do wish though that more of a focus was put on the IMA who actually classified these funds in the cautious and balanced managed sectors. One of the things an IFA should be able to rely on as part of his/her due diligence process is on funds being put in the correct sector and you dont need to be a rocket scientist to know that there is nothing cautious about private equity.

May I suggest that the next Blog should discuss that then?

I have a feeling like Phil Melville, if we take away the disgruntled employees continuing to ask questions to the answers they already know, maybe one or two investors who we all feel sorry for, the remainder are adviser firms who got in to bed with fund houses with this loan business that was offered.

Maybe if the non stop criticism of some of the individuals of Cru would stop, Gavin Lumsden would like to detail the deal that these advisewrs enetered in to, how they got it past their due diligence, how many advisers may be involved, are the loans repayable upon demand etc etc, now that I would find interesting as I heard about it, but as an IFA cannot be tied to any one organisation or beholding to anyone.

Can we get back to some decent blog please?

You really are a contradiction of mildly irritating proportions.

Is it that you like the sound of your own voice (sic).

For all your blah blah blah about the nature of this newswire giving excess coverage to this particular story you remain the single biggest contributor to ALL the blogs relating to it.

I repeat to you: IF YOU DONT LIKE IT GO ELSEWHERE

Clearly, those who have vested interest in this story would like to discuss it, leave the room if you do not wish to. Other people are allowed to take an interest.

Or is it that you have some relationship with Arch/Cru ? as you seem to have appointed yourself as person in charge of shifting the limelight away from these fraudsters.

If you really arent interested in this topic (and not just sitting there refreshing the screen every two minutes) then you won't be reading this and wont bother replying.

Lets see if you can resist.......

Where have you been for the last years of this blog?

Nowhere where I have seen.

I did warn of this witchunt about 17 blogs ago on this subject.

Now Citywire were banned from the fund meeting so how is that helpful to a site which is meant to be professional and keep us informed?

It is just fortunate that this was a nothing fund, are the doors going to remain open for Citywire with this new 'Sun' style reporting elsewhere, I ask?

I liked the site as it was, that is why I am complaining so much, intelligent conversation about different subjects with members of the public dropping in, this isnt informative, it isnt moving off the spot.

Just a bunch of no hopers dancing on a grave.

I see you hold no interest at all about the loans given to IFAs to put clients in these funds, says it all really.

Are you for real ??

You are pure comedy gold.

Possibly even the Alan Partridge of the IFA world.

Thank-you for amusing me so much.

Clearly the focus of this forum has been inadvertently been directed away from getting answers. Is not getting answers from cru/Arch/Africa Invest the purpose of this interactive arena?

Perhaps, as its obvious Mr. Maguire is not going to answer some of the valid questions voiced, it is time to stop and acknowledge, because of recent press, the future of this company and its fund.

There is no future. Mr Maguire & Mr Ainscough have lost all hope of getting new investors and any previous investors have lost a lot.

We should end the blog with that point.

Hi Gavin

Other than perhaps reducing the frequency of Cru related blogs, can I make 2 suggestions: -

1. Please can we stop anonymous postings. I would suggest asking everyone posting to these forums to include their FSA no, perhaps? Or some other gate-keeping mechanism. There are too many "Tom", "Dick" and "Harry" entries here (Ok, we know who Harry is, but you know my point). Many could be 1 or 2 people posting under multiple names, perhaps.

2. Joanne has made a point that she suggests we should end on. Could we perhaps have 'closure' to each blog after a set time or once the arguments are going around in circles or ceasing to be constructive?

Cheers

John

One thing I have noticed is a desire for Maguire to mislead the market/public. Was it just me or in the Private finance DVD Cru issued ,did Maguire not talk about Cru having gone through the process of refinancing with a Bank in his conversation with Michael Derks? Followed by a throw away comment that Cru didn't need the money.

So what is the truth and what is the truth on Africa?