Crux Asset Management has left its former authorised corporate director bruised after yanking a £1.9bn mandate and handing it to Thesis Unit Trust Management.
Fundrock Partners has been forced to take £4.4m of emergency funding from its Luxembourg parent company, Fundrock Holding, to stabilise the UK funds administration business and meet capital requirements, the Financial Times reports. In the year to March 2019, the UK funds administration business reported a £1.9m loss after tax. It is set to post another loss in the current financial year.
The Financial Times reported the emergency funding came after Crux Asset Management pulled its Oeic and ICVC funds from the business in September 2019. Crux moved four strategies to Thesis Unit Trust Management (Tutman): the Crux European Special Situations and European funds, managed by Richard Pease (pictured), and the UK and UK Special Situation funds.
A month later, Tutman handed Crux the Sanditon European and UK funds as the boutique fund shop, founded by Cazenove duo Tim Russell and Chris Rice and later joined by Julie Dean, prepared to shut down.
Crux said the change from Fundrock to Tutman had followed a strategic review.
Several other asset managers are also expected to pull mandates from Fundrock, the Financial Times said.
Carmignac, Mattoli Woods and Pictet are among the asset managers that employ Fundrock as ACD for their funds, according to FE Fundinfo.
The bruising period for Fundrock Partners comes amid a Financial Conduct Authority probe into the entire ACD industry in the aftermath of Link Fund Solutions’ role in the Woodford Equity Income fund suspension. The FCA will be examining the commercial conflict for outsourced ACDs that are meant to be providing oversight of their clients.
Xavier Parain, chief executive of Fundrock Partners’ parent company, said the group’s private equity owner Blackfin Capital was committed to investing in the group. While he acknowledged 2019 had been a challenging year for the UK business he told the Financial Times that it had been considered a turnaround story at the time of purchase in 2017.
Parain said it had broken even at the end of 2019 and a pipeline of new clients outnumbered those departing.
The combined group managed £69.9bn across the UK, Ireland and Luxembourg, as of March 2019.
