The Vinum Fine Wine fund has been closed by its directors after pressure from the Guernsey Financial Services Commission (GFSC).

The fund was suspended in January because of a number of valuation errors but the administrator and custodian failed to resolve the issues that led to suspension and the fund has been closed.

It was one of five funds which members of failed IFA network Alpha 2 Omega (A2O) were banned from investing in by the Financial Services Authority (FSA) last year. The advisers were also prevented from investing in Barclays Capital Jade Elixir Deposit Account, Curzon Fixed Capital Protected Profit Lock in Deposit Account, Guildhall Absolute Return Fund and Arch Cru Funds.

The suspension led the A2O management to put restrictions on commission its adviser members could take.

The fund’s board and the custodian, Butterfield Bank, had been working on revising the fund’s net asset value, in conjunction with the administrator PSG Active Fund Services. However, the fund’s board have now written to shareholders telling them the fund is to be closed.

In an update Vinum said it was with the ‘greatest regret’ that it had too close the fund.

‘This has been a very traumatic period for the directors as the factors contributing to this decision have been beyond their direct control,’ the board said.

‘These relate to administrative issues that have remained consistently unresolved between the administrator and custodian. The protracted period that this has been evident for ensured that the GFSC were advised of the problems and they became concerned at the delays and issues raised.’

The board said the GFSC then insisted on changes to the fund, despite having approved the scheme particulars at outset, leaving the directors with ‘no alternative than to make the decision to close the fund.’

In a letter to shareholders, the board added: ‘The directors have concluded that it is no longer in the investors’ best interests to continue the fund, and therefore the directors regret that the most prudent course of action is to instigate an orderly closure of the fund as quickly as possible.’

The directors said the Channel Islands Stock Exchange, where the fund is listed, and the GFCS had each confirmed the suspension of the fund ahead of its impending closure.

The directors said they were now working to establish the best way to close the fund whilst protecting investors’ interests. A timetable for closing the fund is to be produced within the next ten days.

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