Business
Assistance to clients of the SJP Group invested...
Assistance to clients of the SJP Group invested....
About this update from St. James's Place Plc
[{"type":"text","content":"\n St James's Place plc (\"SJP\"), the wealth management group, today announces that it is taking steps to assist those of\nits clients who, through St. James's Place, have invested in the Enhanced Fund of AIG Life (UK)'s Premier Access Bond or\nPremier Bond (\"the Bonds\"). Separately SJP is also announcing its intention to establish an internal reassurance entity\nto enhance the capital efficiency of the group.\n\n\nAssistance to clients of the SJP Group invested in AIG Life (UK) Bonds\n\nA small number of the Group's clients have invested a proportion of their liquid assets in unit-linked funds relating to\nthe Bonds marketed by AIG Life (UK). In September of this year a sudden and rapid increase in concerns over the\nfinancial strength of AIG Life (UK)'s ultimate parent, AIG, Inc., led to a large number of investors seeking to\nimmediately withdraw several billion pounds from these Bonds. As a result, and in order to treat all of its clients'\nfairly, AIG Life (UK) took the decision to defer redemptions for 3 months in order to manage a more orderly exit from\nthe Enhanced Fund. As credit markets are still very volatile and illiquid, the value of clients' assets in the Enhanced\nFund is likely to be significantly impacted to the extent that clients seek to cash in their units in December.\nConsequently, AIG Life (UK) have offered all investors in the Enhanced Fund a choice between cashing in their units in\nthis fund in December, or switching into a new fund that should enable some distributions of capital to clients in\n2009-2011 and will fully mature in July 2012. AIG Life (UK) is offering clients who agree to remain invested in the new\nfund until July 2012 a guarantee as to the minimum value of their units on that date. The total value of the Group's\nclient assets remaining in the Enhanced Fund is £69 million.\n\nIn recognition of the unprecedented nature of this situation and the unexpected consequences for its clients, St.\nJames's Place has put in place the following arrangements to assist them:\n\n· SJP will make a one-off goodwill payment to its clients calculated by reference to the current value of their units in\nthe Enhanced Fund. The expected cost of this payment is £6.9 million and will be made in April 2009.\n\n· A liquidity facility provided by Bank of Scotland Private Banking will make loans available to t...