Risk Without Reward

Crosby takes over management of Forsyth funds

As a follow up to our post below, Crosby Capital Partners announced today "that it had successfully concluded negotiations with David Dunkley and Steve Akers of Grant Thornton UK LLP, the Administrators of Forsyth Partners Limited and Forsyth Partners (Europe) Limited.  As a result, Crosby will be appointed as the manager of the Forsyth funds and will hire Forsyth's management, research and distribution team.  As part of the negotiations, Crosby has also secured the ongoing support of key operational and administrative partners to ensure the continuity and consistency in the management and administration of the Forsyth funds.  The Forsyth funds will continue to trade under the Forsyth name."

Forsyth Searches for Sale - from Croydon

Forsyth, a $1.2 billion fund of fund manager, has been placed in liquidation, with the UK Financial Services Authority revoking the firm's permission to conduct investment business.  It is variously reported that the management company had entered into financial difficulties, although assets in the firm's funds are reported to be secure.  The administrator, Grant Thornton, is seeking to facilitate a sale of at least some of the firm's assets to Crosby Capital, an investment bank based in London and Hong Kong, leading interest.

Interestingly, despite having a relatively modest $1.2 billion in assets, it is reported that the firm had almost 40 products - we are always conscious of the costs and effort required to keep track of multiple entities.  The firm also has numerous sales offices worldwide, including Hong Kong, Seoul, Hong Kong, Cape Town, Bulgaria, Uraguay and Zurich, with a holding company based in Dubai and the London operating entity based in Croydon, a remote suburb closer to Gatwick airport than Mayfair.  1% of $1.2 billion would generate only $12 million in income, which, as the liquidation proves, seems insufficient to support such an extensive office network.  Financial viability of the management company is always a necessary question during the operational due diligence.