Crosby's Apollo launch no fix after Forsyth problem

By Laurence Fletcher

LONDON (Reuters) - Crosby Asset Management's (CSBq.L) bid to draw in money with fund manager Tom McGrath is unlikely to deflect attention from its crumbling asset base and an ill-timed acquisition last year.

Apollo Multi Asset Management, the ailing fund firm's new joint venture with McGrath and several other managers, may struggle to find asset gathering easy in falling markets, when investor appetite to put money into funds has plummeted.

And what looked like a shrewd deal at the time -- the high-profile acquisition of funds from Forsyth Partners which had gone into administration -- now no longer does.

"These are difficult times. We'll be relying on switching money from old supporters and money from other parts of the world," McGrath told Reuters.

The September 2007 deal with Forsyth, which had over-expanded in Dubai, brought in $1.2 billion (£800 million) in assets at a time when client money was hard to come by, but market carnage and huge investor outflows have since decimated those holdings.

Assets at Forsyth have now tumbled to just $112 million, after allowing for recent fund closures and a backlog of redemptions from its fund of hedge funds and before allowing for market falls in the fourth quarter.

"Clearly if we'd known what was going to happen in the market we wouldn't have bought it," Crosby's Chief Operating Office Steve Fletcher told Reuters in September this year.

Reuters at the time revealed the firm was in talks to sell or liquidate a range of Dublin-domiciled funds due to redemptions, and sell two Bermuda-based portfolios.  Continued...