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03 December 2010

SL highlights benefits of TEPs

6% returns says 'equities', but risk says 'bonds'

SL Investment Management (SL), one of the UK's leading Traded Endowment Policy (TEPs) and Life Settlement product providers, is urging risk-averse investors to revisit TEPs as returns routinely exceed cash and bond rates, whilst offering a similar level of security.

SL has been in the market for 20 years (originally trading as Surrenda-link) and has invested over £1 Billion in TEPs.  Earlier this year, the company reinforced its market position with the acquisition of both Policy Plus and Freetrawl.com, and by making a substantial investment into the TEP Exchange platform.  SL believes that TEPs have a number of unique benefits for investors, despite recently becoming a 'forgotten' asset class; 

  • TEP Investments can offer net returns in excess of 6% per annum. Often returns at this level require a higher degree of risk than usual and lock-in periods that tie up the investment, which is not necessarily the case with TEPs.
  • TEPs are invested in the With Profits funds of the UK's major life offices.  Not only are they ring-fenced from the Life Office itself, but also covered within the rules of the protection offered by the Financial Services Compensation Scheme.  This offers an unrivalled level of security for the level of returns offered.
  • TEPs benefit from the inbuilt bonuses that have already been allocated to the policies, and cannot be taken away. This effectively offers a degree of capital protection unavailable in similar investments - estimated to be in the region of 85%.
  • Finally - TEPs are liquid. At any time, they can be cashed in to the issuing Life Office for their quoted surrender value; these surrender values are on the rise.

Jeremy Brettell, Chief Executive of SL, said: "TEPs are a great investment opportunity for both institutional and (via a properly structured fund) retail investors, achieving smoothed returns with low volatility, and a known future maturity date.  Market conditions mean there has rarely been a better time to invest.  To help investors understand the asset class, we have produced a free guide to secondary life assets, and this is available from our website.