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Arc Capital and Income transferred to Merchant Capital


The joint administrators of Arc Capital and Income, Robin Davis, John Alexander and Melvyn Carter of Carter Backer Winter, have brokered a deal for Arc Capital and Income’s business to be transferred to Merchant Capital.

ACI was adversely affected by potential claims by investors in Lehman-backed products.

ACI arranged the underlying investments for its structured products with a range of different banks. Three of ACI’s structured products were backed by firms in the Lehman Brothers Group. The marketing and distribution of these products, along with the wider structured products market, have been subject to a FSA review. It was these potential claims which brought about the administration of the company.

Carter Backer Winter has completed a deal with Merchant Capital to take over ACI’s business. This ensures the continuity of the business as all the funds under management will now be controlled by Merchant Capital.

Alexander (pictured) says: "This is excellent news for the 10,000 investors because effectively their investments (collectively worth around GBP100m) will be accessible virtually without interruption."

Had Carter Backer Winter not been successful, investors would have suffered from additional costs that are incurred by the administrators as they deal with the administration of investments.

Products backed by the Lehman Brothers Group will not be transferring to the new business. This affects investors in the Fixed Income Plan 6, the Stepped Kick Out Plan 5 and the Bull & Bear Enhanced Investment Plan 3. These funds are being ring fenced and will be dealt with separately. The Financial Services Compensation Scheme is investigating whether it can accept claims for compensation from investors in these plans.

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