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EEA Life Settlements fund to reopen to investors

The EEA Life Settlements fund is preparing to reopen to investors after policy maturities of more than £48.3m were paid into the fund.

The sum from 46 policy maturities was paid into the fund between December 1, 2011, and June 1, 2012.

The payments were made after dealing in the fund was suspended following a wave of redemption requests sparked by the FSA labelling traded-life policy investments as “toxic”.

Peter Winders, marketing director at EEA, says: “These latest figures show that the underlying assets of the fund continue to perform as expected. One of the options likely to be offered to investors wanting to redeem when the fund reopens is to move their investments into a run-off vehicle.”

He adds: “The experience of the last few months underlines how the fund is continuing to benefit from maturities at significant rates and will bring reassurance to those who might be considering this option.”

Investors in the EEA Life Settlement fund are to be offered three options: remaining invested, opting for run-off shares that will see money returned as policies mature, or the selling off of holdings to institutional investors at a discount.

According to EEA, the fund’s net asset value has increased by 3.55 per cent in the five months since trading was suspended.

Winders says: “Life settlements is a historically non-correlated and low volatility asset class that is able to produce stable and consistent returns even through periods of stock market turmoil, such as we have experienced in the past six months.

“As such, the asset class is likely to remain attractive to sophisticated individual investors and institutions in the UK and globally.”

EEA has previously attacked the FSA for its criticism of the asset class, in which it claimed the products should not be recommended to retail investors.


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. David Parkinson 12th June 2012 at 5:34 pm

    Good News. Should never have happened & well done to EEA for the handling of this situation caused by the FSA’s outlandish comments. A fund well run with monthly detailed disclosure of information. Special Mention to Peter Winers who has answered calls & emails throughout.

  2. Congratulations to EEA and the investors. EEA have taken every precaution to protect the best interests of all concerned parties. The FSA should temper themselves prior their issuance of faulty and wreckless dialog regarding investment products that perform as proposed to investors.

  3. …but investors can still only get their money out now if they accept a discount to the value, so open to new investors but not for those who want to get the growth that seemed to be there. A run-off option is great, and reinforces the point that investment returns should be achievable from this asset class, but it shouldn’t have been offered as a liquid fund if there isn’t liquidity.

  4. This fund was still marketed as low risk in the early days by EEA, which anyone who has conducted even the most basic Due Dill should see that it is not.

    Performance aside, this is still a UCIS and carries additional risk over and above some regulated options Liquidity was always one of them, it just took a (badly thoughtout) FSA comment to really bring the to the fore.

    This needs to be promoted carefully and offered only to those for whom it is appropriate, not feature as 100% of some little old ladies pension pot…

    Still treat with Kid gloves would be my suggestion, if you now continue to recommend this, expect the regulators full attention (especially after comment was made to TLP in the recent Independant/restricted guidance published last week.

  5. I’m probably the only one going to read this, but I can’t help checking figures! On the Nov 11 EEA factsheet the average life expectancy is shown as 27 months and number of policeis held as 698, so in simple terms over 150 policies should have matured in the last 6 months. Even allowing for a high degree of skew towards longer maturities and an uneven distribution, only 46 maturities in the last 6 months looks low and suggests the life expectancy (and pricing models) may not be working so well.

  6. In case it isn’t just me reading this… I should correct my earlier post (must have been a late night). With an even distribution the last 6 months should have seen about 75 policies mature – so looks like things may not be too bad. Probably worth staying for the run-off option rather than suffer a poor fire-sale price.

  7. Why are we still waiting? What has Peter Winders been doing if one year one the fund is still suspended? We could do with an update on how the underlying assets are doing.

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