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By Donald A. Steinbrugge, CFA - Founder and CEO of Agecroft Partners, a global hedge fund consulting and marketing firm.

Over the past decade, life settlements hedge funds have steadily gained acceptance among institutional investors. Their appeal lies in the potential to deliver attractive double-digit returns while maintaining low volatility and a high Sharpe ratio. Just as importantly, the strategy offers meaningful portfolio diversification, given its historically low correlation to private credit risks and broader capital markets.

At the 2025 Gaining the Edge Global Cap Intro event, one of the largest cap intro events in the alternative investment industry, there was a significant increase in the number of investors interested in life settlements. Out of hundreds of alternative investment funds that participated in the event, a life settlements manager had the third highest number of meetings with investors.

This paper explores the growing attractiveness of life settlements as an investment strategy. It provides an overview of the strategy's fundamentals, highlights the social benefits to policyholders, and examines the role of longevity risk in shaping outcomes. In addition, it analyzes how leading fund managers enhance returns and generate alpha through specialized expertise, and concludes with the strategic benefits to institutional allocators who incorporate life settlements into their portfolio.

1. Life settlements overvie......................

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