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Alternative Market Briefing

How life settlements managers earn their keep

Tuesday, November 02, 2021

amb
Tony Bremness
B. G., Opalesque Geneva:

Life settlement managers operate close to the six-feet-under segment of the financial industry. And provided they manage their biggest risk accurately, which is no small feat, the returns to investors are almost as certain as, well, death and taxes.

Tony Bremness, managing director of Laureola Advisors, a specialised boutique asset manager, explained life settlement investments in a recent Opalesque Virtual Manager Visit.

"The life settlement transaction is one of the few in the financial markets that is a genuine win-win situation," he says. "Both the seller and the buyer win; the seller of the policy wins because investors typically pay three to four times more than the insurance company would pay as surrender value. The investor should be a winner because these policies trade at IRR (internal rates of return) between 12 and 14 percent and sometimes as high as 16 to 18 percent. But for the investor to be a winner, the assumptions that go into that valuation and that go into that calculation of the IRR on purchase must be accurate."

Life settlements have many benefits over other asset classes in that many of the assumptions that go into the investment decision are known: the price on......................

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