From Professional Adviser

A UK fund house has been forced to freeze redemptions on one of its funds, after becoming caught up in an investigation by the Mauritian regulator into an alleged Ponzi scheme.

In a letter seen by Professional Adviser, Apollo Multi-Asset Management has written to investors stating its Mauritius domiciled £5.81m Four Elements Apollo fund has been suspended – meaning investors cannot move money in or out.

Apollo said the freezing of redemptions is solely due to restrictions placed on the fund’s umbrella cell company, Four Elements PCC, by the Mauritius Financial Services Commission (MFSC), which has revoked its licence to operate.

There is no opportunity for anyone to run off with those assets

The Four Elements Apollo fund is an individual cell of Four Elements PCC, a Mauritian based protected cell company structure that is currently in administration, in which all individual cells are ringfenced from each other.

Four Elements PCC has been stopped from performing any activity whilst the MFSC carries out an investigation into claims Mauritius-based Belvedere Management group, a sprawling financial services company that administers Four Elements PCC, is running a network of Ponzi schemes.

The allegations were made by investigative website Offshore Alert.

The MFSC had already launched enforcement action against Four Elements PCC in October 2014.

The Four Elements Apollo cell invests in three underlying funds, all managed by Apollo Asset Management. These are its two FP Apollo Multi Asset funds – Balanced and Growth – and the Apollo Structured Opportunity fund.

Apollo Multi Asset Management said in the letter that it can monitor all of the assets of these funds and confirm that all assets are accounted for, and that the Four Elements Apollo cell is unconnected to any allegations.

All assets of Four Elements will be suspended whilst the MFSC investigates the Four Elements PCC. Timescales for this are currently unknown.

Apollo Multi Asset Management partner Craig Wetton said it is in discussions with Four Elements PCC’s administrators Pricewaterhousecoopers – drafted in by the MFSC to run the company independently during its investigation – and that no liquidation of Four Elements PCC will occur.

Wetton said he is “confident” Apollo Four Elements investors will be able to regain access to their money.

“The assets of the [Apollo Four Elements] cell cannot be called on by any other cell. The underlying assets are subject to stringent custodians rules.

“There is no opportunity for anyone to run off with those assets.”

He added that Apollo Multi Asset Management has started looking at giving investors the opportunity to move out of the Apollo Four Elements fund to a new fund under the same mandate.

IMAGE; spotlight-pa

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