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Categories:Regulation

Ford leads £91m attempt to take Lifemark out of administration

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Source: VisMedia

Lifemark provisional administrator KPMG Luxemburg has been offered a loan facility of up to £91m, arranged by Keydata founder Stewart Ford, in an effort to take it out of administration.

This week’s Money Marketing reveals that KPMG’s Eric Collard was approached with the facility last week. It is being proposed by a US bank which Money Marketing understands is prepared to offer up to 50 per cent of the value of the Lifemark life settlement portfolio.

Assuming the loan is in place by the end of September, Ford (pictured) predicts an initial payment of £18m to bondholders, principally the FSCS, after the loan is completed and an eventual 100 per cent of return of capital invested, with funds being returned quarterly over a five-year period. This would see the FSCS recoup industry money paid in compensation. A Lifemark FSCS levy cost the industry £326m, with advisers paying £93m.

The lender’s preliminary due diligence values the Lifemark portfolio at over £182m. Ford suggests the actual value of the portfolio, taking into account maturities, is around £670m. The loan amount will be determined by the lender’s final valuation of the portfolio and the completion of its due diligence.

Earlier this year, the FSCS and Investment Management Association looked to offer an £18m loan to meet premium payments for 2011 and talks are understood to be ongoing. Keydata products were underpinned by the Lifemark policies and are designed to generate a return based on life insurance payouts. Lifemark is facing a liquidity issue after a lack of mortalities earlier this year.

Ford says the loan facility, if accepted by Collard, will cover the outstanding premiums and servicing costs at risk and allow Lifemark to come out of administration, with a new management team in place approved by the Luxemburg regulator and the FSCS. Lifemark entered administration in November 2009.

Ford says: “My role will be limited to arranging and introducing the offer of a new loan facility to Lifemark. I do not propose to have any further involvement in the funding or management ofLifemark.”

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Readers' comments (10)

  • "lack of mortalities"

    Quite!

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  • Sick of the sight and sound of Lifemark, and the levy it has cost me and my partners. Lifemark has caused my investors nothing but worry. But, if the above is true, at least the Ford guy is trying to fix the problem. The Government and MP's , FSA etc are useless and just fob IFAs off. This loan is the obvious way forward out of this nightmare. I urge KPMG to seriously consider this for the sake of my, and everyone else's clients.

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  • What is Collard waiting for, this is the best news we have had regarding Lifemark and should be taken up immediately. Every day that passes causes more concern. As for 'exasperated me' quoting lack of mortalities is simply disgusting. It would seem to me that people who have foresight and can see the true value of the portfolio, are prepared to put their money on the line. On one estimate there have been £15.5m maturities in the last month and they are expected to rise to £20m the following month. That will escalate as time goes by to over £100m for the year. Begs the question, if this portfolio is "worthless" as some have said, how could SF be able to raise £91m to re-finance Lifemark?

    Some one, somewhere, sees the true value and are prepared to be patient. Come on Collard (how can he be dithering) get your skates on!

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  • Believe it when i see it in writing, and when im voting for whether to take it or not ( im a shareholder, over 50K). Until then, I have read and heard so much , but seen very little actual action from Ford or the Regulator. Why dont the regulator sit Ford down, ask him how to work this thing, and then maybe we all get our money back. It beggars belief that these two parties are clearly not co operating with each other. Mr sants, Mr Ford, please work together and fix this , then we can all get on with our lives , and not in poverty.

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  • Anonymous - 10.24am.

    If you are 'in poverty' as a result of one investment that has gone wrong, then I suggest you find a new IFA.

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  • WTF - 12.54 pm
    Have you never heard of someone being in "poverty" from one bad investment decision?? Obviously you are one of the priviliged few who have so much money you dont ever make a bad inv decision. Why would you write that when we investors are suffering. Idiot.

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  • I think it demonstrates the plan may have been viable and had certain parties not gone in as heavy handedly the outcome for the investor might have been a better one.
    The IFA's might also have been spared some grief and financial cost.
    FSA are meant to promote financial stability and confidence?

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  • Hes technically correct anonymous - you seem to be a victim of the 'eggs in one basket' approach to investment.

    I honestly empathise with your situation if you have money tied up but if this was recomended for your whole portfolio, then why not make a mis-selling claim against your adviser.

    If you did not have an adviser then you need to blame the person who decided to put more than 10% of your money with Lifemark
    (Just being honest)

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  • This would appear to be some luke warm news, should any of the names involved get off their asses and make the obvious decision.

    We have three clients invested with Keydata International, does anyone know where and how compensation fit's with these investors?

    Any information or contacts would be greatly appreciated.

    A very frustrated IFA in Switzerland

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  • Ooh, anonymous. Ruffled your feathers a little there?
    Ok, so my point may have been a little blunt but I think Alan Green has summed up what I was getting at. Many people around the country and globe are suffering financial hardship at the moment, but the word 'poverty' was expressly used. If anyone is seriously in 'poverty' as a result of ONE investment, then that person really does need a new IFA. My point still stands.

    WTF
    (Idiot with eggs in diverse portfolio of baskets)

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