25-year-old funds management company collapses

An Australian investment research, advice and funds management company founded in 1989 has collapsed.

After weeks of speculation, van Eyk Research called in voluntary administrator Trent Hancock of Moore Stephens Sydney Corporate Recovery Group on Monday.

Van Eyk Research has four business arms—investment research through van Eyk Research, consulting through van Eyk Consulting, financial advisory through van Eyk Advice and funds management through van Eyk Blueprint Series—and the administrators said in a statement it entered administration because of the “recent and sudden closure of the Blueprint Series of managed funds”.

“This has presented short-term financial challenges as it is currently structured to the parent company, van Eyk Research Pty Ltd and the company determined that the prudent course of action was to enter voluntary administration,” said Moore Stephens.

Moore Stephens said the administration process will allow for the quarantine and preservation of van Eyk’s investment research, consulting and financial advisory arms, while options for capital restructuring are investigated.

According to Fairfax, Macquarie Group, which is the entity responsible for the Blueprint Series of funds, forced the closure of 13 of the 14 funds, which contributed approximately 65% of van Eyk’s revenues, after a $31 million investment made by British hedge fund Artefact was alleged to have breached a van Eyk investment mandate.

However, Moore Stephens said unit holders in the Blueprint Series funds are not involved in the administration, with Macquarie Group still responsible for those funds.

Fairfax reports the Blueprint Series of funds at one point managed “close to $1 billion” but recent events are said to have damaged the value of the remaining van Eyk business. One investor told Fairfax the van Eyk research arm was previously worth $20 million but could now be valued at $5 million or below.

The Australian reports van Eyk’s financial accounts for 2013 show its funds management arm provided $5.78 million or 65% of the company’s $8.33 million in total revenue.

According to the van Eyk LinkedIn profile, the company employs between 51 and 200 employees.

Van Eyk chief executive Mark Thomas labelled the administration process as “regrettable” but said it is a necessary step.

“We will work actively and constructively with the administrator and all our stakeholders to facilitate a more sustainable corporate platform to ensure certainty and growth for our core business,” said Thomas in the same statement.

“We remain absolutely committed to providing our clients with a seamless quality research and consulting service and it will remain business as usual for van Eyk in delivering on this commitment while the voluntary administration process is underway.”

SmartCompany contacted the administrators but did not receive a response prior to publication.