The ill-starred Forsyth Global Technology fund, launched on the cusp of the global tech bubble, has ...
The ill-starred Forsyth Global Technology fund, launched on the cusp of the global tech bubble, has finally been laid to rest.
Although the fund was long earmarked for closure, having never held more than $3.5m, the fact that not all intermediaries with clients in the fund were told about its demise has caused some frustration.
One intermediary said: "As a broker, I had no communication from Forsyth's in Croydon, Jersey or Dubai regarding the proposed closure. The first I knew was when a client called me between Christmas and New Year."
However, Forsyth claimed that all intermediaries receiving trail commission were informed, and Forsyth could not realistically track every change of adviser a client went through.
While this has brought into focus the widespread industry practice of not making fund closures public, it also prompted the Forsyth marketing director Dennis Clegg to point out that often a failing fund was not closed at all but merged – an even quieter way of killing a bad track record.
"After all," he said, "What is a merger but a closure by another name? We are at least being honest about it. We shot the dog. We probably could have merged it with the Thematic fund, as that has technology exposure, but the grown up position is to say it is a fund out of time and there is no sense running it. It is not going to work so let's shut it down."
The Global Technology fund opened for business in March 2000 and its poor performance in the worst possible market conditions, combined with redemptions from the fund, meant the firm had intended to close the fund for some time. The fund slipped under $2m for a period of four weeks at the tail end of last year and, on 4 January, Forsyth sent a letter to all investors saying the fund would be closing at the end of the month.
The Forsyth statement said: "Given its small size, and with little likelihood of any future growth, its directors intend to close the fund on the basis that it is no longer economically viable or in the best interest of shareholders to keep it open."
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