Lifemark investment adviser Meditron resigns

Meditron Asset Management has resigned as investment adviser to the troubled life settlement vehicle Lifemark, which backed Keydata products.  

The New York-based investment company was responsible for selecting the life settlement policies which make up the Lifemark portfolio.

‘They have decided on their own to resign,’ said a source close to Lifemark. ‘At this time they had a very limited added value service and quite significant fees.’

Lifemark was put into provisional administration by the Luxembourg financial regulator in November, which stopped it paying income to investors in February 2010 due to liquidity problems.

However, Meditron chief investment officer Walter Gerasimowicz claimed in March 2009 that Lifemark maintained adequate cash reserves to meet its obligations to pay premiums and argued that investors should be pleased with the performance it had delivered.

Geoff Hartnell of Vintage IFA and a member of the Keydata creditors committee said that Gerasimowicz and Meditron had questions to answer about the problems with Lifemark portfolio, pointing to the liquidity problems caused by not enough life policies being redeemed.

‘Look at the investment reports and Meditron are talking about good performance but Lifemark was predicted to have 30 to 35 deaths a year but it has actually experienced eight to 10 maturities a year. I would regard that as under performance,’ said Hartnell, adding that he had concerns about the quality and construction of the Lifemark portfolio.  

Meditron's role was to liaise and verify the work of Montage Financial Group, which was responsible for sourcing the life settlement policies for Lifemark.

The 25,000 investors who put £350 million into Keydata products backed by Lifemark are still waiting on a restructuring deal, which was understood to involve US hedge fund CarVal Investors.   

Meditron was contacted for comment but did not respond before publication.