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Alternative Market Briefing

Private placement life insurance has grown in popularity among affluent investors

Friday, September 30, 2016

Komfie Manalo, Opalesque Asia:

Hedge fund investors are looking at private placement life insurance (PPLI) as concerns about tax lingers across the industry, said Aaron Hodari, managing director at US-based wealth advisory firm Schechter Wealth.

PPLI is a legal means for investors to avoid paying income taxes on their gains in hedge funds and other alternative investments. The vehicles - essentially insurance wrappers for alternative investments - were first rolled out in the late 1990s but only began to gain popularity after the IRS issued guidance in 2003 about how the insurance vehicles could be used.

Speaking at a the recent panel discussion in New York City, Hodari stated, "As high net worth investors have continued to increase their exposure to alternative assets, they have recognized the tax inefficient nature of those assets. Private Placement Life Insurance and Annuities offer an attractive vehicle to own those assets in a tax efficient manner. The industry is growing rapidly."

The event was attended by 100 hedge fund advisors, high net worth investors, and family office representatives.

In a......................

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