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City Financial bosses tapped business for £4m in loans

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City Financial bosses tapped business for £4m in loans

The heads of troubled fund firm City Financial tapped the business for almost £4 million in loans, accounts for the company have shown.

City Financial filed notice on 22 February that it intended to appoint administrators within 10 days in the event that it becomes ‘unable to pay its debts’, which chief executive Robert Hain conceded was ‘likely’.

As of the most recent accounts, dated to December 2017, Hain owed the business £965,150, while vice-chair Andrew Williams owed £2.8 million, made up of multiple loans and accrued interest, according to a report in the Sunday Times.

The company declined to comment on the purpose of the loans or whether they remained outstanding.

The business also in 2014 paid Beaux Ideal, an interior decorating business owned by Hain’s wife Tracy, £149,971 and $154,300 for ‘goods and services’

City Financial's assets under management fell from $3.3 billion (£2.5 billion) to $1.2 billion in 2018, which was a particularly difficult period for former JP Morgan star Shahraab Ahmad’s Decca fund, which saw its value plunge 21% or $141 million, on misfiring conviction in volatile markets.

Losses before tax hit £16.7 million in 2017, surging from £1.4 million in 2016, as costs ballooned from £25.6 million to £40.5 million.

City Financial said these costs were related to the acquisition of three funds, in London, New York and Hong Kong, investment in infrastructure and one-off human resources costs

The former Invesco duo acquired the business in 2006. It employs a series of well-known managers, such as David Crawford (pictured), who joined the firm from Octopus to run the City Financial Absolute Equity fund.

That fund has also had a tough time and is ranked 94th out of 96 funds in its peer group, losing 25.9% in the 12 months to the end of January. According to its factsheet, the fund has returned 10.2% since its inception in 2008.  

The team also includes former New Star fund of funds head Mark Harris, who joined the business at the start of 2013 to take charge of its multi-manager range.

 

 

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