St James Place Diversified Assests Unit Trust suspended

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/82175880#Comment_82175880

That text was from their publication. They didnt post a sample letter but I suspect the wording would be along the same lines. Perhaps worded differently to reflect the personalised nature vs the press release style published.

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/82176264#Comment_82176264

I think as we do not definitively know what the OP received in his letter it is difficult to draw any sort of conclusion, though if their letter was indeed as informative as the publication, I am struggling to understand why the OP expressed such concerns.

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/82176337#Comment_82176337

Yeah, we are working a bit in the dark. However, I think it's fair to say that nowhere in the letter that the client received would they have said that the pension is going to be lost.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82175623#Comment_82175623

Undoubtedly the private equity and private credit components were sold at a discount to fair value. Why would a willing purchaser not take advantage of a distressed seller?

However a little research indicates the private equity/ credit components should have originally only been between 15-20% of the overall portfolio value with the rest being liquid shares/bonds.

In any event private companies despite issuing audited accounts are notoriously difficult to value using the usual metrics employed for quoted stockmarket shares and bonds.

In the same way that a retail investor gain or lose ( depending on when they originally purchased) when selling in the usual fashion, they similarly bear any loss (or realise gains) compared to their original acquisition cost, on wind up. That's what you generally sign up for as an investor in the markets.

These voluntary winding up scenarios, are very common for both unit trusts and investment trusts.

This unit trust was of a very decent size at £1.4 billion ( compared to many) but if redemptions were accelerating what was happening was that the liquid investments were being sold first, leaving behind an ever increasing percentage of the portfolio in illiquid private equity/credit. Eventually this would lead to a Woodford style liquidity crunch. S J were wise to initiate the wind up when they did to avoid a greater stampede for the exit .

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/82176380#Comment_82176380

Given the OPs reaction - and doubtless many others who are not as financially acute as your good self - reassurance as regards the pension in bold should have been in there. Omitting to say the pension will not be lost will still give cause for concern to many recipients as it is still unclear what the position is. Many folk take a half empty glass approach when it comes to such communications and - understandably - think the worst. As I said - a lack of audience understanding from folk in ivory towers.

Triumph13

Yep. It would have been so easy to include a sentence in the first paragraph to the effect that management will sell all the underlying investments in an orderly manner, credit customers with their share of the proceeds, and ask them how they want those proceeds reinvested.

Given that, by definition, SJP customers are not sophisticated investors, it's very easy to see how some will panic if the letters are anything like the quote from the website.