Keydata investors in disarray after tip off over £3m in worthless assets

Investors in a Keydata traded life settlement fund based in the Cayman Islands fear it has bought £3 million of worthless assets from SLS Capital, the investment vehicle at the centre of the scandal surrounding the company.

The Keydata International Traded Life Policy fund was supposed to buy second-hand Lifemark life settlement units from Keydata customers cashing in their investments. However, investors in the fund fear it has bought £3 million of units from Luxembourg-based SLS Capital after a tip-off from fund custodians Blue Sea International.

A total of £103 million of life settlement assets of SLS Capital were discovered to be missing in July by PricewaterhouseCooper (PwC), administrator of Reading-based Keydata Investment Services. The £6 million Keydata International fund was set up in April 2009 by Stewart Ford and Mark Owen despite Keydata International directors being aware of a problem with SLS Capital since October 2008, when it stopped making income payments to Keydata UK products.

Private investor Stephen Carr, 53, was concerned by the management of the fund, which has been suspended since June. ‘I was informed by Blue Sea at first that the contaminant was over 50% [of the fund]. Now I have been told it is between 60% and 70%,’ said Carr. ‘I need to know how much it is worth. Something needs to be done. ’

Former Keydata sales director Owen (pictured) suggested the manager of the fund was Walter Gerasimowicz of Meditron Asset Management – an investment adviser for Lifemark. ‘I’m not sure what it [the fund] has got in there now. I’m waiting for a conversation with Pritesh [Desai, Blue Sea managing director],’ said Owen.

Desai told investors via email that he had been chasing Owen daily over the ‘tainted’ SLS Capital assets. ‘I am aware that the current directors are trying to substitute the tainted assets that the fund has with good assets,’ said Desai in an email last September.

Blue Sea told investors last week it had pursued Owen for details of a restructuring plan proposed for the fund since before Christmas but had had no response. However, Desai has also drawn fire as it emerged he was a director of the fund at launch but has since resigned. The Cayman Island Monetary Authority may wind up the fund unless another auditor can be found to replace PwC, which resigned earlier this month.

Advisers and consumers with money in the Keydata International are trying to get into contact with other investors through the Keydata Victims website.