One Asset Management (ONEAM) is seeking approval from unitholders of its ONE LS4-UI fund to extend the fund's liquidation period by up to five years, as an "unprecedented" liquidity squeeze in the secondary market for US life settlement assets has delayed investor repayments.The ONE LS4-UI fund, which has assets under management of roughly 3-3.5 billion baht, invests through an offshore master fund in US life settlement assets -- life insurance policies purchased from policyholders and held as investment assets.
According to Sutthiroj Sitiwatananon, chief executive for foreign at ONEAM, the underlying portfolio continues to perform as expected and there has been no deterioration in asset quality.
However, a sharp decline in liquidity in the secondary market has limited the fund's ability to sell assets and return capital to investors within the original time frame.
"The portfolio remains healthy and transparent, with performance progressing in line with expectations," he said. "The issue is a temporary liquidity shortage in the market, not the quality of the underlying assets."
ONEAM said volatility in the global private credit market during the fourth quarter of last year significantly reduced the number of institutional investors willing to purchase life settlement assets. In addition, bids for such assets fell well below their estimated fair value.
