Ashcroft invests in fast-growing Arc

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The Independent Online

Lord Ashcroft, the deputy chairman of the Conservative Party, has spent over 2m buying a stake in a small UK-listed asset management company, and immediately realised a paper profit of almost 1m.

Ashcroft, a significant donor to the Tories and former treasurer of the party, has taken a 21 per cent stake in Arc Fund Management Holdings, which specialises in the wealth management sector, through his investment vehicle Mayfair.

He bought over 26 million new shares at 8p each, and despite the value of the stock slumping 13 per cent to 11.5p on the news, his stake is worth just over 3m in the open market.

In October Lord Ashcroft, who is believed to have a personal fortune of over 800m, agreed to sell his cleaning services company OneSource Services to ABM Industries for 48.10 per share, more than seven times higher than the 655p closing price the previous week.

Arc has grown from holding 25m under management at the turn of the year to 275m currently. It has boosted its size primarily through acquisitions, buying the structured product provider Nvesta and Throgmorton Asset Management.

Beyond Ashcroft's investment, the group is to raise a further 900,000 via a placing of over 8 million shares at 11p each, carried out by its broker Fiske via a placement, with one source close to the company saying this signalled another deal. Fiske expects Arc's assets under management to grow to 500m by the end of the year.