Meteor Senior Life Settlements Sterling Fund
EEA Life Settlements Fund PCC Limited (“EEA”) Run-Off Shares – Redemptions
Your Questions Answered
What is the background of Run-Off Shares?
Following the suspension in the creation and trading of EEA shares in November 2011, EEA shareholders were provided with the option of Continuing or Run-Off Shares under a Restructuring Proposal put to investors by EEA in September 2013. The restructuring became effective on 1st January 2014.
What is the aim of Run-Off Cells?
The aim of run-Off Cells is to make distributions to Run-Off Shares as the sums assured are collected from the policies held within the portfolio as the policies mature on the death of the life assured. Distributions are funded by redeeming Run-Off Shares at their prevailing share price at the time the redemption.
How often are redemptions made?
When the restructuring became effective in January 2014, it was EEA’s intention to consider its cash position at the June and December valuations each year to determine if it had sufficient Available Cash to make a redemption.
In practice, redemptions have been outside of this timetable (see below)
What is Available Cash?
Not all of the cash held by EEA is available to meet redemptions. In particular, the cash required to pay the next two years premiums has been excludedfrom the cash that is available to meet redemptions.
In April 2017, EEA announced that it had reduced this requirement to 12 months premiums, freeing a significant “reserve” of cash to be distributed to holders of Run-Off Shares. This allowed EEA to make an unscheduled redemption of Run-Off Shares on 10th April 2017.
Why have EEA not kept to the timetable specified in the Restructuring Proposal?
Three of the five redemptions to date have been made outside of the June/December timetable.
The redemption made in January 2016 was calculated at the November 2015, following the completion of a sale of a significant number of policies within the portfolio.
The redemption made in November 2016 was based on Available Cash as at 30th September 2016, which had been boosted by the maturity of a number of policies with large sums assured in the three months since 30th June 2016.
As noted above, a further redemption, based on Available Cash at the March 2017valuation, was made possible by a reduction in the premium “reserve” from 24 to 12 months.
In announcing that there would be no redemption following the December 2016 valuation, EEA suggested that it would keep the situation under review with a view to making further redemptions as cash levels permit. That announcement and the pattern of redemptions to date suggests that EEA is taking a more pragmatic approach to redemptions rather than sticking rigidly to the June/December timetable.
How much has been redeemed to date?
The table below shows the redemptions to date and the valuation dates on which those redemptions were calculated. The first figure show the percentage of shares redeemed at each redemption and the figures in brackets show the redemptions as a percentage of the original number of Run-Off Shares held.
Cell / June 2014 / November 2015 / June 2016 / September 2016 / March 2017 / TotalMeteor Senior Life Settlements Sterling Fund Run-Off Cell / 2.90%
(2.90%) / 30.75% (29.85%) / 6.56% (4.41%) / 15.27% (9.60%) / 19.77% (10.53%) / N/A (57.29%)
Meteor Senior Life Settlements Sterling Fund II Run-Off Cell / 2.90%
(2.90%) / 29.50% (28.65%) / 6.54% (4.48%) / 15.27% (9.77%) / 19.77% (10.72%) / N/A (56.52%)
Note: Figures are shown to two decimal places only. Therefore,the total shown in the final column may not tally with the individual amounts shown. The first figure for each entry is the percentage of remaining shares redeemed at a redemption; the figures in brackets shows what proportion of the original number of shares redeemed.
When is the next scheduled redemption?
EEA is next scheduled to assess the Available Cash at the 30thJune 2017 valuation during July 2017, but please see the comments above concerning the timetabling of redemptions.
How long will it be before all Run-Off Shares are redeemed?
In each of the redemptions to date, EEA has utilised all Available Cash to make redemptions. Its ability to make redemptions is therefore dependent on the rate at which policies mature until it is able to make a further redemption.
EEA’s monthly factsheet indicates the levels of Available Cash in each Cell. This information can give an indication of the prospects for a redemption, however it is not possible to predict too far in advance when a redemption will occur. This this will depend on the rate of maturities, premium payments and the discretion of EEA.
EEA’s Q&A and monthly factsheet can be viewed at
Are there any measure EEA could make to advance redemptions more quickly?
A mentioned above, EEA has taken other actions which has advanced the rate of redemptions.The redemption at the March 2017 valuation was made possible by reducing its “reserve” for the payment of premiums from 24 months to 12 months. As EEA cannot reduce the reserve to below 12 months premiums, it does not have any current flexibility to make a further reduction.
The November 2015 redemption was made possible by the sale of a large number of the policies held within the portfolio during 2015. If the rate of maturities remains slow, a further sale of policies appears to be the only means available to EEA to accelerate the rate of redemptions.
Notwithstanding a further sale of policies, this will depend on how quickly policies mature. EEA published quarterly statistics which, as at the end of March 2017, indicate that 33% of the remaining sums assured are not expected to be received before 2022 based on current life expectancy estimates.
Maturities may happen at a faster or slower rate than indicated by the current life expectancy figures and the information supplied by EEA is therefore only able to provide a broad indication of time scales. It is not possible to provide a definitive indication on how long the process will take
This information was last updated in on 9th May 2017.