U.K.-based Centurion Fund Managers said it has suspended redemptions from the Argent Fund to protect investors in the fund, according to the International Adviser.

The story said Centurion sent a letter to investors last week after several large investors asked to withdraw their money.

Centurion blamed a liquidity imbalance in the fund to the increase in the expected discount rate on purchase of policies and lower number of maturities in the fund.

In the June, 5, 2008, issue of The Life Settlements Report, Centurion said it had listed the $85 million Argent Fund on the Euro Multi Lateral Trading Facility in Luxembourg. It said that Argent is a fund of funds.

Commentary by Michael Abraham:

This will always be a problem for small funds in illiquid assets and gating the fund is the right thing to do.  Large investors are normally professional investors and are well aware of the issues when investing in such a fund.  Any fund manager worth his salt would agree phased redemption with such investors at the time of investment but of course it depends on how desperately the manager wants that investment and how concerned he is for his shareholders.

Published on 26 Aug 2011 at 02:59 pm