EEAIG has been working on behalf of investors to get the best deal for secondary shares.
Last October, investors in the $410m (£331m, €387m) Guernsey-based fund finally recieved a £49m payout after EEA redeemed approximately $16m worth of shares for investors holding continuing shares as of 20 October.
However, in the latest investor update Trinkwon warned that investors may now have reached a ‘crossover’ point beyond which it would be more profitable for them to sell off their EEA shares rather than to wait until maturity.
“This is a complex evaluation, but my preliminary findings are if all policies were sold now for (Fair Value + 15%) then the crossover has already occurred.
“A sale would increase the total redemption cash for investors by up to $97m (24%) between 2017 and 2022, depending on the timing and assumptions used,” he said in his latest investor update on Monday.
Trinkwon added that any decision “on the timing of a sale should take into account the various valuation, longevity, market and currency risks of holding on and the dis-proportionate impact of future expenses.”
EEA fund
Launched in 2005, investors have been trapped in the stricken EEA fund since 2011 when it experienced a rush of redemptions after the Financial Conduct Authority (FCA) warned retail investors not to invest in what it controversially described as “death bonds”.
The fund resumed trading in 2014 after the Guernsey Financial Services Commission approved a restructure that divided shares into continuing shares for those wishing to remain in the fund and run-off shares for those wanting out.
Around 40% of the shareholders in the fund hold continuing shares, while the rest have run off shares.
In September 2015, EEA paid investors £56.1m last September after it sold 188 US life insurance policies to an undisclosed buyer for £83.3m.
