Keydata Crisis: Norwich & Peterborough talks to US hedge fund over rescue

The Norwich & Peterborough building society is in talks with US hedge fund CarVal Investors over a rescue plan for Keydata’s troubled Lifemark investment fund.

Citywire understands that N&P, backed by CarVal, will offer Lifemark, which backed a number of Keydata investments, a bridging loan this weekend and investors will be asked to vote on a full restructuring proposal in the New Year.

Lifemark provisional administrator Eric Collard of KPMG will be forced to put the £350 million life settlement vehicle into liquidation today if it cannot secure a short-term loan. Lifemark has experienced chronic liquidity problems since February 2010, diced with liquidation in June and is reported to have sold $11 million of policies in August.

‘It now looks like CarVal are involved again with Lifemark through N&P,’ said a source close to negotiations. A second source confirmed N&P was working with CarVal on a deal. 

CarVal was involved in talks with Lifemark in May but leaked terms of the proposed £40 million deal alarmed the 25,000 consumers invested in Lifemark and the deal collapsed. The previous deal would have seen investors face a wait of up to 14 years for the return of their capital.

N&P, faces mis-selling claims from 300 clients, represented by solicitors Regulatory Legal.

The East Anglian building society is working independently of a group of investors and advisers, including Keydata founder Stewart Ford, which is also trying to rescue Keydata.

N&P declined to comment on who it was working with to put forward a restructuring plan for Lifemark. A spokeswoman for the building society. ‘I’m afraid we can’t confirm who we are working with or are talking to.’ 

Collard said he was bound by a confidentiality agreement with N&P and could not comment on the rescue plan.

The Financial Services Compensation Scheme announced in September that it expected to be able to pay out to Lifemark investors but would be unable to calculate what they were owed until the end of October.