Friends Provident International, Skandia International and Hansard all offered mirror versions of at least one of Castlestone’s funds.
Castlestone’s problems began in June when the Irish Central Bank imposed a temporary ban on the sale of its Dublin-domiciled funds. Despite the ban being lifted, in July the problems deepened as the Financial Services Authority in the UK executed search warrants on two of the company’s UK premises.
Despite the company publishing a number of statements in a bid to reassure investors, over the course of the last week Castlestone closed all new subscriptions to its entire Dublin-domiciled range and is now winding down that part of the business. Its British Virgin Islands funds meanwhile are not understood to be being wound down and remain open to new subscriptions.
In December last year, FPI made mirror funds of the Dublin-domiciled, and now closed, Castlestone Aliquot Commodity Fund and Castlestone Aliquot Agriculture Fund the first pure commodity funds available within its Singapore Global Wealth Builder unit-linked savings plan.
The company, which also offers investors mirror funds of the BVI-domiciled Castlestone Aliquot Gold Bullion Fund and Castlestone Aliquot Precious Metal Fund, said the funds “offered daily dealing and valuation with independent administrators, custodians and auditors appointed” therefore “fully meeting our admissibility requirements.”
It also described its due diligence process as “robust” and said the decision to add a new mirror fund is always made after conducting thorough market research.
A spokesperson confirmed that FPI is currently closing down the mirror funds for the two Dublin-domiciled funds and will be switching investors’ money into a cash only fund once returned by the administrators of Castlestone.
The spokesperson added that FPI is having “ongoing discussions with Castlestone regarding the two remaining FPI mirror links to the BVI domiciled Castlestone funds concerning any potential re-opening of them for new monies.”
A spokesperson for Skandia meanwhile, said it was currently awaiting further advice from Castlestone on what its next steps should be. In the meantime it has suspended new investments into its Castlestone Aliquot Commodity mirror fund and investments into Castlestone Aliquot Agriculture Fund through its UK platform, Skandia Investment Solutions.
Meanwhile, Nick Griffin, head of international sales at Generali International, said the company took the decision to pull investors money out of the two Castlestone funds from its unit-linked product range two weeks ago to avoid any further problems. Griffin said he felt the company “had a responsibility to those investors as Generali had made the decision to make the fund available for them.”
Griffin also said the funds, in particular the BVI domiciled Castlestone Aliquot Gold Bullion Fund – the first offered by Generali, were chosen because at the time Castlestone were offering investors something very different and attractive.
