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SJP to make £6.9m goodwill payment to AIG enhanced fund clients

St James’s Place has offered to make a one-off goodwill payment of £6.9m to its clients in the frozen AIG Life enhanced fund proportionate to their investment size.

The firm has £69m worth of client assets remaining in the fund and says it will make the payment in April 2009 “in recognition of the unprecedented nature of this situation and the unexpected consequences for clients”.

SJP is also offering to make cash available to clients who choose to take the maturity plan and remain invested in the fund until 2012, provided they have an immediate need for the money that they are unable to meet through the fund’s regular distributions or their own means.

The interest rate on this loan will be 3 per cent above the Bank of England base rate.

The liquidity facility will be provided by Bank of Scotland and SJP will pay the loan fees and indemnify the loan up to a maximum liability of £4.8m.

SJP chief executive David Bellamy says: “The collapse in the money markets is unprecedented and our clients are the victims of an extreme and unforeseeable set of circumstances.

“Nevertheless, we recognise the inconvenience and distress this will have caused and want to help.

“Our offer of support, which we believe is fair to all our clients, and other stakeholders, further demonstrates our determination to maintain and enhance our long term relationship with them.”

Separately, SJP is launching an internal reassurance facility, subject to the regulator’s approval, which would allow it to reassure cashflows from future pensions business.

The firm hopes that the new entity will give it a more efficient capital structure giving a boost to IFRS profits of £7.2m – offsetting the costs of the AIG measures.

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