Lifemark rescue talks with CarVal collapse

Lifemark could still sign a deal with CarVal or another third party which was willing to invest into the portfolio.

‘The only way to pay for the premiums is to look to a third party funding or sell assets,’ said a source. ‘It is not easy to sell assets in the current environment…It is sad for investors but unfortunately this is what they have invested in.’

The FSCS announced last week that it would make a decision in September on whether Lifemark investors would be entitled to a payout. The FSCS said it had carried out an in-depth investigation into Lifemark with the support of the Financial Services Authority and Keydata administrator PricewaterhouseCooper.

Even if the FSCS confirms investors are eligible for a payout, they may face a long wait before they can make a claim.

Many investors have lost income but could struggle to prove that they have suffered a capital loss when Lifemark remains in administration and the performance of its portfolio could improve.

Another Luxembourg-based life settlement vehicle, which was involved in earlier restructuring talks with Lifemark, has been suspended to new investors.

Catalyst Investment Group has closed its ARM Capital Growth bond product and ARM Assured Income plan products to new investors.

Catalyst claims it closed the product and pulled literature from its website while it tried to move them to Dublin.

Money invested in the ARM Capital Growth bond product is used to buy life settlement assets which are held in bonds listed on the Dublin Stock Exchange.

These bonds are owned by a Luxembourg-based special purpose vehicle called ARM Asset-backed Securities SA but Catalyst hopes to novate the bonds to a new special purpose vehicle based in Dublin.

Catalyst claimed to have been working on the plan since January but was unable to explain why this was necessary.