Thu, 20/09/2007 - 07:45
Crosby Capital Partners has concluded negotiations with David Dunckley and Steve Akers of Grant Thornton UK, the administrators of Forsyth Partners and Forsyth Partners (Europe), to take over management of the Forsyth funds, a week after the fund of funds manager and research provider was placed in administration.
The problems encountered by Forsyth have been blamed on an over-ambitious international expansion policy that saw the group move its headquarters to Dubai and establish offices in Zurich, Sofia, Cape Town, Seoul, Taipei and Montevideo.
The forced sale of the business was precipitated by the withdrawal of the licence of the group's Dubai-based distribution arm by the local regulator last month because it was unable to meet the prescribed operating capital requirements.
Crosby, which describes itself as an independent, deal-focused, Asia-oriented merchant banking and asset management group with offices in London, Hong Kong and Singapore, has agreed to take on Forsyth's investment management, research and distribution team.
Around 70 of the group's staff will be retained but Paul Forsyth, who founded the firm as a fund research and rating business in 1991, and his brother Kevin, who succeeded him as chief executive two years ago, are reported to be leaving the group.
Crosby has also secured the ongoing support of operational and administrative partners to ensure continuity and consistency in the management and administration of the funds, which will continue to trade under the Forsyth name. The price paid by Crosby has not been disclosed.
The transaction will bring AIM-listed Crosby 39 fund of funds products covering equities, bonds and alternative strategies with some USD1.2bn in assets, comprising the Forsyth Alternative Income Fund, Forsyth Diversity Fund, Forsyth Equi-Beta Fund, the Forsyth Funds umbrella fund, Forsyth Indian Opportunities Fund, Forsyth Leveraged Diversity Fund, Forsyth Global Property Fund, Forsyth Global Commodity Fund, Forsyth Global Private Equity Fund, Forsyth Alternative Strategies Series and Forsyth Managed Strategies Fund.
Crosby says it expects the deal to increase its assets under management significantly while providing a 'robust platform' for the strategic growth and diversification of its asset and wealth management business.
The sale of the business is subject to regulatory approval from the UK Financial Services Authority, the Irish Financial Services Authority, the Cayman Island Monetary Authority and the Bermuda Monetary Authority.
'I am pleased that the negotiations with Grant Thornton have been brought to a successful conclusion and that we not only provide continuity for the funds under management, but also a clear direction for future growth,' says Crosby chief executive Simon Fry.
'We have every confidence in the Forsyth team and look forward to them becoming an integral part of Crosby Asset Management and helping Crosby continue the strategic expansion of its business.
'As everyone knows, the problems within the Forsyth Group stem from over-ambitious international expansion and are unrelated to the current turmoil in the sub-prime market; the high quality and integrity of the Forsyth fund management operation remain intact.'
The Dubai Financial Services Authority announced on August 27 that it had withdrawn the licence of Forsyth Partners Global Distributors 'to carry on financial services activities in or from the Dubai International Financial Centre after it failed to meet the applicable regulatory capital requirements and was unable to demonstrate a capacity to remedy that breach'. The DFSA also with drew the licence of another group subsidiary, Forsyth Partners (Middle East), at the firm's own request.
Forsyth chief investment officer Peter Toogood says: 'I am delighted that the negotiations have been speedily and successfully concluded and that we are able to reassure our clients of our continued focus on providing them high quality and innovative services.
'We are all excited by the opportunities provided by becoming part of an international group such as Crosby that has a clear commitment to the development of its asset management business globally.'
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