According to the latest investor update from the EEA Investors Group, the $410m Guernsey-based fund agreed on 3 April to pay out $18.7m to investors with continuing shares, after reporting four new maturities (i.e. deaths) of life insurance policies in the first quarter of 2017.
On 26 April, EEA confirmed it would pay a further $35.6m to holders of run-off shares, which make up 60% of the fund.
The sum is the first significant payout since last October when investors received a £49m payout after EEA redeemed approximately $16m worth of continuing shares.
In addition, the fund’s board has decided that the time period for the cash it holds to pay for premiums on current underlying investments should be reduced from two years to one year until further notice.
Last month, David Trinkwon, coordinator of the EEAIG, which has been working on behalf of investors to get the best deal for secondary shares, warned the EEA fund may now have reached a ‘crossover’ point beyond which it would be more profitable for EEA to sell off their life policies rather than hold them to maturity.
EEA fund
Launched in 2005, investors have been trapped in the ill-fated EEA fund since 2011 when it experienced a rush of redemptions after the Financial Services Authority (FSA) 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.
