Thames River Hillside Apex Fund Suspended

Thames River HILLSIDE APEX Fund

On 21 October 2008 , the Board of Thames River Hillside Apex Fund SPC took a decision to suspend all trading for this particular fund with immediate effect.

The Board has cited the deterioration in liquidity conditions as the reason for taking this action and the need to protect equally the interests of those investors who wish to remain in the fund and those who wish to sell. The Fund Managers say security selection in relation to the fund has been based on a credit intensive, bottom up investment process . T hey believe there is significant value in the corporate bonds which the fund holds and that this value should materialise over time.

The Funds Investment Committee of Generali International has taken the following decisions:

Premiums & Switch-in requests awaiting allocation to Units

The Fund Managers have recently published a September price which could be made available to those investors who remitted premiums or switch-in requests between the August price cut-off and the September price cut-off dates. However, in view of the current difficulties with the liquidity position of this fund, the Funds Investment Committee of Generali International has decided that it would not be in the best interests of investors to commit further monies to this fund under these circumstances.

The cash generated by premiums and switch-in requests since the August cut-off date will therefore be retained within the cash holding fund. Any further premiums received will similarly be held in the cash holding fund until further recommendations are made by the Funds Investment Committee following consideration of the options provided by the Fund Managers

In the interim, policyholders who wish to switch their cash holdings and/or redirect their inbound premiums, to another fund of their choosing, are welcome to do so and should submit their written instructions in the normal way.

Surrenders, Partial Surrenders and Switch-out requests

At all times Generali International undertake to sell units at the ‘next available’ price. The conditions for unit redemption provided by the Fund Managers have always been subject to notice.

However, during recent years, the volume of purchase instructions received from policyholders by Generali International exceeded the volume of sale instructions. This enabled the company to offset these transactions, so both sales & purchases were effected on the same monthly date. 

In the current market conditions, policyholder redemption trades over the last two months have substantially exceeded purchase trades . Generali International therefore has to await the next available redemption price provided by the Fund Managers in order to process those redemption trades. Unfortunately, due to the decision made by the Fund Managers on 21 October 2008 to suspend trading, all pending instructions are now on hold.

What happens next?

Generali International has been provided with options in relation to the fund and these will be considered by the Fund Investment Committee over the course of the next few days. We will of course ensure that both advisors and policyholders are kept informed.

In view of the circumstances, no further purchase or sale instructions in relation to this Thames River Hillside Apex Fund will be accepted until further notice.

Generali International regret any inconvenience resulting from the decisions made by the Fund Managers.

Signed

Peter Hobbs

Head of Generali International