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EEA reports 10% drop for suspended Life Settlements fund
by Michelle Abrego on Aug 14, 2013 at 12:57
EEA has reported a 10% drop in the net asset value (NAV) of its suspended Life Settlements fund following a review.
In a letter to investors, Chairman Mark Colton said the EEA board, along with its advisers ViaSource Funding Group, have made changes to the fund’s valuation policy, which has resulted in the drop in NAV.
‘This was an involved process, not only in terms of interpreting the facts, but also in making subjective assessments,’ he said.
‘Calculating the life expectancy of older, medically impaired lives is not an exact science. There have been considerable changes in the period since 2011, in the market generally and within the fund. None of these changes could have been foreseen with any certainty.’
EEA has historically set the estimated life of a policy by averaging estimates from two specialist firms and then adding 12 month periods. However, results from a mortality review and updated life expectancies showed that only about half of all policies were expected to mature in time.
As part of its revised valuation process, it will now double the life expectancy of policies in its calculations.
Colton also said that the board intends to review each policy every two years.
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by Michelle Abrego on Dec 05, 2013 at 16:07