The fund’s board of directors have agreed to sell the policies for £83.3m ($130m, €114m).
The proceeds of the sale, combined with reduced future premiums, could mean the Guernsey-domiciled fund will have around £96.1m in available cash at the start of October.
Of this cash, around £56.1m will be distributed to investors holding run-off shares, who constitute around 60% of the shareholders in the fund.
The remaining cash will feed into those continuing cells of the fund, and will be used to meet future redemption requests, or for purchasing new policies.
Best interests
“The board has made clear that the decision to sell the policies has been taken in the best interests of the fund,” said Barry John, head of business management at EEA Fund Management, the marketing agent for the fund.
“A number of bids were received and the board accepted the one which best meets the fund’s strategic objectives while being at a price acceptable to the fund.”
EEA anticipate the money will be paid to run-off shareholders in the early part of November.
Warning
The EEA Life Settlements Fund was suspended in November 2011 after the Financial Services Authority (FSA), the FCA’s predecessor, said investments into traded life policies were “toxic” and possibly unsuitable for retail investors.
This warning had a negative impact on many life settlements funds, including the EEA Life Settlements Fund.
When the fund was revalued in June 2013 it was found to have lost $200m (£129m, €183m) of its “fair value”.
In July, the Action Group for Life Settlements had its claim against the UK Government rejected by the European Human Court of Human Rights.
