08/14/2012 | 05:36pm US/Eastern
Since the last audit the Fund has completed a review of the life expectancies of the portfolio. It has also obtained more up to date policy illustrations. As part of that review it has revised its estimate of the premiums required to fund the portfolio to maturity based on the latest information available.

The new information impacts on the valuation of the premium liability. The Notes to the accounts require that there is adequate disclosure for the investors to be able to draw valid comparisons to last year’s valuation and can understand movements involved. The auditors have been provided with information in the last couple of weeks that should allow them to audit the liability and assess the adequacy of the disclosures.

On 21^st Feb 2012 Assured Fund made the following announcement:

The Investment Manager of Assured Fund (the “Fund”) would like to make the following announcement concerning the Fund’s net asset value. This announcement follows a letter circulated to all investors in the Fund on 18 January 2012.

Although the Fund continues to perform well in relation to other more traditional asset classes, the performance of the Fund has slowed in recent years largely due to lower than expected mortality among the individuals covered by the Fund’s portfolio of life settlements (the “Insured Parties”).

Accordingly, the Fund has undertaken a complete review of the life expectancies used to value the Fund’s portfolio of senior life settlement policies.

The revision of each life expectancy estimate was specific to the medical and lifestyle conditions of each Insured Party. As a result of the review the life expectancy estimates of the majority of the Insured Parties have been increased with a corresponding decrease in the Fund’s Net Asset Value of approximately 34%.

For further information please contact Blue Sea International +44 (0) 1624 624247

About Assured Fund

Assured Fund is an open-ended investment company incorporated in the Cayman Islands in 2003. It has a current Net Asset Value of approximately US$277 million and holds a portfolio of life settlement policies with a maturity value of approximately US$700 million. Over 60% of the insured parties are over the age of 85 years and all policies purchased by the Fund are outside of their contestability period.

In May 2011 this story appeared on the Money Observer website:

Assured Fund imposes exit restrictions on investors

Investors wanting to get their money out of one of the largest life settlements funds are being forced to take a discount of up to 30 per cent due to liquidity problems.

The $431.3 million (£25.4 million) Assured Fund, run by Policy Selection Limited, invests in the US life settlements market, meaning it buys life policies and receives the payout when policyholders die.

It has run into problems with its cashflow, causing investors wanting to exit to do so at the net realisable value of the fund, rather than net asset value. Andrew Walters, the company’s finance director, says this means people have withdrawn their money at a discount, with some investors facing a cut of 30 per cent.

Walters isn’t sure when redemptions will be allowed at full NAV again. However, he adds: ‘Our fund is one of the few to have secured a lending line which it will only use for the funding of the premiums on the asset portfolio. Therefore there is no likelihood of the assets lapsing and the underlying assets still continue to deliver a positive return.’

Julie Lord, financial planner at Bluefin Group, says she is worried about the situation. ‘This is a knock-on from the global financial crisis,’ she says. ‘Investors want to free up some of their money; they won’t sell their shares as they may make a loss, so they go to their holdings that they believe are safer, such as a life settlements fund. This rush for redemptions is making the Assured Fund suffer.’

Lord says she is now looking at reducing her clients’ exposure to the fund.

Like many life settlement funds, the Assured Fund is not authorised by the Financial Services Authority.