Life settlements fund generates £40m despite FSA ‘toxic’ label

Life settlements fund EEA has generated nearly £40m in revenues in the last two months, despite its suspension following “unprecedented” redemption requests.

The fund's suspension followed an announcement by the FSA that it planned to ban the sale of traded life policy investments (TPLIs), which purchase mainly US life insurance policies.

However, between the £600m fund's closure to new business on 1 December and the beginning of this month, 36 policies have matured totalling $62m (£39m), at what the company called above-normal levels.

Marketing director Peter Winders said the figures were validation that the fund continued to generate positive returns, despite FSA pressure.

"Though the fund is suspended, it continues to generate returns as policies mature," he said.

"These figures show that the EEA Life Settlements Fund is experiencing maturities in excess of premium payments and so generating cash at the fund level.

The FSA consultation, which closed on 23 January, is expected to be published in the next few months.

Its decision will then allow the fund directors to decide whether to reopen the fund, Winders said.

"Investors and their advisers will have greater clarity about their options and be able to make an informed decision as to whether to redeem or not."

The FSA's decision proved unpopular with advisers, who told IFAOnline in December their "reckless" decision has endangered client money.

Latest portfolio statistics show the fund holds 660 policies, issued by 86 life companies.