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From Kirsten Bischoff, New York: Opalesque recently spoke with Joe MacLean, one of the Founding Partners of Global Secured Capital (GSC) about the firm’s investment strategy financing life insurance premiums. The strategy, which MacLean and partner Richard Kearns run through the Global Secured Capital Fund LP, has returned a steady, 1%-1.35% per month since its inception in June 2007.
High quality risk, not correlated to the general economy
The firm, which has just under $200m of capital, is set up like a life insurance carrier, only in hedge fund format. According to MacLean, there is significant opportunity to produce attractive risk adjusted returns in the life insurance markets. It is an interesting strategy in a market environment that has investors searching for diversification. “If you look at the financial services universe, the life insurance space is the largest segment of the financial services industry that has not really been penetrated by the hedge fund industry. Life insurance carriers earn about 12-15% return on equity, year in and year out, regardless of whether a hurricane hits Florida, or the equity market is up and down, or what is happening in the commodity or real estate market.” MacLean said. “It is very high quality risk because it is not correlated to the general economy and is not correlated to traditional capital markets.”
The portfolio team, which has been investing in this ...................... To view our full article Click here
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