Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/new-model-adviser/article/a704033
EEA suspension could be lifted in six weeks under restructure
by Michelle Abrego on Sep 19, 2013 at 10:00
EEA could lift the suspension on its Life Settlements Fund in six weeks under restructure plans, but investors will still face a long wait for a return of their money.
The board of directors of the EEA Life Settlements Fund has sent a restructure proposal to shareholders. If agreed, the restructure would take place on 1 November.
Under the proposal, which needs a 75% majority approval from those shareholders who vote, investors can elect for continuing shares or run-off shares.
The EEA board is encouraging shareholders to vote in favour of the restructuring proposal, warning that if the restructuring is not approved, it is likely a liquidator will be appointed to wind-up the fund and sell its assets.
Simon Shaw, chairman of EEA Fund Management, the marketing agent for the fund, said: 'The board has made clear that it believes that the restructuring proposal is in the best interests of the shareholders as a whole and is strongly encouraging shareholders to take part in the vote, either in person or by proxy, and to support the restructuring proposal.'
Shareholders who elect for continuing shares will continue to hold their existing shares in the same cell of the fund in which it is currently held with additional dealing restrictions.
Any surplus cash generated from the maturity or sale of policies attributable to a continuing cell will be reinvested in a new Irish-domiciled life settlements fund or in other similar instruments.
However, investors who hold the continuing shares will not be able to redeem those shares for a 23-month lock-up period from when the restructure becomes effective. Following this period, redemptions will be quarterly upon giving 95 days’ notice.
Those who elect for run-off shares will exchange their existing shares for shares in a newly created corresponding cell of the fund. These will not reinvest cash generated from policies that mature or are sold, but every six months surplus cash will be distributed among shareholders until proceeds from the final policy held in respect of each run-off cell have been returned to shareholders.
EEA has said that investors may be able to choose to split their investments between two options, subject to certain minimum requirements.
News sponsored by:
Today's top headlines
Challenged by growing risk aversion?
Challenging financial markets over recent years have resulted in growing risk aversion among British savers and led many to seek safety in cash. Click here for more.