Shareholders in the suspended EEA Life Settlements fund have formed an action group to argue the recent vote on its restructure is invalid.
Plans to restructure the traded life policies fund, which was suspended in 2011 following a surge in redemption requests, were approved by investors last month. Shareholders will now be placed in continuing or run-off cells depending on whether they wish to remain invested in the fund or not.
But the EEA Investors Group argues the vote on the restructure is invalid as the fund has lacked approved accounts since December 2010 and because EEA warned that investors faced “a huge capital loss” if they did not vote in favour of the restructure.
The group is also seeking “lower costs, better financial returns, better transparency and better shareholder accountability for the maturing of the remaining life policies within the fund”.
EEA Fund Management declined to comment.
Vertem Asset Management co-founder Gary Stockdale, which does not invest in traded life policies, says: “While traded life policies have the potential to produce steady and attractive returns, we are concerned investors do not always fully appreciate the risks associated with such investments.”
EEA Investors Group, which was formed with seven investors and has received applications from at least 10 more, is seeking to contact other shareholders and can be reached on EEAInvestors@gmail.com.