Investment Update
January 20 2006 - 4:05AM
UK Regulatory
Investment Update
Since the last investment update in October last year, further substantial
progress has been made towards completing the portfolio acquisition programme.
As at 31 December 2005, the portfolio consisted of 103 policies acquired at an
aggregate cost of $51.8million, in addition to the two policies which have
already matured (which together cost $1.7 million). Furthermore, completion is
imminent on two additional small bulk deals, which will add 16 policies to the
portfolio at an aggregate cost of $8 million.
A further 12 policies at an aggregate cost of $5.3 million are also close to
completion, and 10 policies costing $3.6 million have had bids accepted.
Assuming all these complete, the Fund will hold 141 policies on 121 separate
lives at an aggregate cost of $68.7 million (excluding maturities). This
compares to our target of at least 130 policies representing in excess of 100
separate insured lives.
The average age of the lives insured in the current portfolio is 82.2 years and
67 per cent. of the insureds are male, with only one policy being on joint
lives. Policies are held with 17 life office groups (represented by 33
individual life offices), each with a current A.M. Best or Standard & Poor's
rating of at least `A'.
The Board will continue to monitor the investment programme with a view to
optimising the level of gearing to be incurred by the Fund, taking into account
the anticipated maturity profile of the portfolio and the policy premium
requirements. In addition to the policies referred to above, the Fund is
currently targeting additional policies with an aggregate acquisition cost of
approximately $13 million to complete the portfolio from a pool of over $138
million worth of bids, which are currently under negotiation.
The table below sets out a range of illustrative returns in respect of the Fund
over the life of the Fund with reference, in particular, to potential changes
in life expectancy and variations in the realisation value of policies still in
portfolio at the end of the Fund's life. The projections are based on the
portfolio at the end of November 2005.
Illustrative redemption yields (% per annum)
Mortality Proportion Exit -10c -5c At Exit +5c +10c
Assumption Surviving Price % % Price % % %
-18 months 38.5 43.11 9.9 10.4 11.0 11.6 12.1
-6 months 46.8 43.35 7.4 8.2 8.9 9.7 10.4
Central 50 43.43 6.3 7.2 8.1 8.9 9.7
+6 months 53.4 43.51 5.0 6.1 7.1 8.0 8.9
+18 months 59.5 43.65 2.5 3.8 5.1 6.2 7.3
Note 1 Note 2 Note 3
Notes
1. The central case assumes that claims experience precisely matches the
medical assessment of the policy lives insured. The changes as shown illustrate
the effect of actual life expectancies varying from the medically assessed life
expectancies by the stated number of months.
2. This shows the percentage of policy lives insured assumed to survive
throughout the life of the Fund.
3. This shows the assumed average realisation values per US$1 of TLI policy
face value in respect of the policies of the surviving policy lives insured at
the end of life of the Fund, by reference to the different mortality
assumptions as stated. The central case corresponds to the market value
assumptions used in arriving at the end-November NAV.
Principal Assumptions
1. The illustrative returns have been prepared by reference to the actual
investments made by the Fund as at 30 November 2005 and on the assumption that
the remainder of the TLI portfolio will comprise policies acquired at current
market prices, as advised by Surrenda-link.
2. The balance of the TLI portfolio will be acquired by 31 March 2006.
3. At the time of full investment, the Company will have gearing (in the form
of bank borrowings pursuant to the existing committed facility) equivalent to
20% of the net assets of the Fund.
4. The Fund will in all other respects be managed in accordance with its
existing investment objective and investment policy and on the basis of the
assumptions as described in the prospectus of the Company dated 16 March 2004.
Source: Surrenda-link Limited
These projections must be understood to be indicative only. The uncertainties
both as to life expectancy and the eventual realisation value of policies still
in portfolio at the end of life of the Fund are considerable. It should be
noted that the basis for the "central case" realisation value corresponds to
current market prices as advised by Surrenda-link, taking account of the
anticipated life expectancy on the planned winding up date of the Fund.
Enquiries:
Peter Clode/Ernie Hayes Tel: 01244 317999
Surrenda-link Limited
Simon White Tel: 020 7859 9000
RCM (UK) Limited
Roger Phillips Tel: 01481 727111
Kleinwort Benson (Channel Islands) Fund
Services
Company Secretary
END
Alternative Asset Opps Pcc (LSE:TLI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Alternative Asset Opps Pcc (LSE:TLI)
Historical Stock Chart
From Jul 2023 to Jul 2024
