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Investors set to fight EEA Life Settlements restructure

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



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There are 6 comments at the moment, we would love to hear your opinion too.

  1. It would be interesting to see the make up of the investors who voted in favour of the restructure. The majority of investors are probably institutions who have a vested interest in delaying any accurate revaluing of their holdings. This will help them both in terms of current income (often based on a percentage of the valuation of assets they hold on behalf of investors) and business valuations. A business earning fees from £100m of assets is worth more than a business earnig fees from £80m of assets (with lot of unhappy customers).

  2. I said it before and I’ll say it again. I agree with the action group. There has been no credible independent valuation and projection of possible outcome sunder either structure upon which an invetsor can make a choice. All they got was vacuous qualitative waffle.

    Moreover, I’m not really sure that rigging the election structure, with non-voters being counted as a vote for change is acceptable procedure. Normally you are assumed to stick with the status quo unless a positive election is made and I’m surpised the Guernsey FSC allowed such a break with convention.

    What happens if an investor is away? What happens if the package of papers gets lost in the post? In such circumstances they have had the nature of their invetsment changed without consent.

  3. In view of Bryan’s comment above, it may be I’m doing a disservice to institutional investors, for which I apologise. They may be well indeed be doing a good job on behalf of their clients.

  4. many investors don;t realise that while their investments are suspended, EEA is still paying trail commissions to the IFAs and platforms, plus ongoing fees and charges to the Directors associated companies. In 2011 these amounted to approx $55m but we haven’t seen the 2012 oe 2013 accounts yet. Why would the Turkeys vote for Christmas ?
    What started as a well managed (but risky) investment now looks like becoming a scam and is starting to smell.

  5. In situations like this is is vital investors and their advisers fully understand what is REALLY going on.

    Far too many vested interests often prevail in situations such as this – ongoing trail commission and fees could result in certain parties preferring the status quo rather than what is in the best interests of investors. And I’m not referring to the supportive IFAs who always put their clients fist but those “parties” who don’t deal directly with clients

    The aims of the EEA Investors Group are to be heartily applauded. I found their site here

  6. The area that looks most unusual is that the Board seems to have agreed to pay out a performance fee of $33.3m in 2011 to the manager and the investment advisor on the basis of the accounts which the auditor qualified. Then in 2012 the net asset value of the funds were written down…

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