Exeter administration leaves investors dangling

The Financial Services Authority has agreed with the decision to appoint PricewaterhouseCooper partners Dan Schwarzmann and Mark Batten as administrators.

Exeter, now a subsidiary of iimia Investment Group, was not included in the settlement between 18 firms and the FSA in December over a compensation package for split-cap investors. Sources close to the firm say Exeter was excluded because it was felt by the 18 companies that it did not have sufficient assets to meet its potential liabilities.

The PwC administrators will now handle claims against Exeter, which is a non-trading company. Exeter has £5.3m in net assets to meet any claims, which is the amount of money remaining from the sale of its open-ended funds to New Star Asset Management last year.

There were up to 10,000 investors in Exeter’s split-cap funds and just over 300 claims are outstanding with the Financial Ombudsman. If any of these claims is successful, and Exeter does not have sufficient assets to pay compensation, investors can turn to the Financial Services Compensation Board, which can pay a maximum of £48,000.

William Long, chairman of iimia Investment Group, says: “Having considered Exeter’s position, the directors concluded there was insufficient certainty the company was solvent following potential mis-selling claims from investors in respect of two funds it previously marketed. Accordingly, the directors of Exeter Fund Managers have concluded that the company should be placed into administration.”