CarVal exits Lifemark bailout deal
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US hedge fund CarVal has backed out of a £40m loan offer to bail out Lifemark, according to reports.
Money Marketing revealed in June that CarVal advanced a short-term loan to Lifemark to help sustain the company and preserve the value of policies held by Keydata investors.
CarVal is thought to have proposed a £40m loan to Lifemark to pay premiums and return original capital to investors over a 14-year timeframe depending on the performance of Lifemark assets. Vintage Financial director Geoff Hartnell was critical of the proposal, warning it may not have been in investors’ interests.
Around 23,000 Keydata cli-ents invested £349m in Lifemark.
Lifemark is in administration and suspended payments to bondholders in March to preserve capital.
It is understood that the firm is in a position where it needs to strike a deal for funding or start to sell some of its life settlement policies.
The Financial Services Compensation Scheme will ann-ounce in September whether Lifemark customers will be able to claim for compensation.
Chelsea Financial Services head of investment products Matthew Woodbridge says: “Perhaps this deal is not big enough for the amount of trouble that is coming along with it.”
Regulatory Legal partner Gareth Fatchett says: “A Lifemark FSCS levy could be much bigger than the Keydata levy and may put some IFA firms under ext-reme pressure.”
CarVal was unavailable for comment.
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