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US Life Settlements

With an estimated annual market of $13bn, Life Settlements present an attractive opportunity for investors seeking more stable returns than often seen in other more widely known asset classes.

What are US Life Settlement Investments?

A US Life Settlement policy is a longevity-based asset that is sold by the original policy owner. The investor pays a lump sum to acquire the policy and then assumes the responsibility to pay the premiums for the remaining term of the policy. In exchange the investor will collect the net benefits on maturity that would otherwise have been received by the original policyholder.  With low-market correlation and low volatility, Life Settlement investments typically deliver more stable returns than those levels seen in other traditional asset classes.

Value Creation in Life Settlement Investment

The primary driver of investor return is accurately assessing the distribution of mortality events for each insured life and thereby arriving at the "right" price for each policy. A regular update of this analysis is required once policies are in portfolio to ensure that the ongoing valuation is fair and consistent for all investors - and ultimately that the price at which investors subscribe or redeem is fair.

Using actuarially robust policy pricing and portfolio valuation methodologies is of vital importance. SL's in-house actuarial team bring dedicated and specialist expertise to enhance and optimise the Life Settlement investment performance. This expertise and understanding of the importance of robust valuation methodology supports SL's position as one of the leading authorities in Life Settlement management.

The Role of the Investment Manager

Whilst Life Settlements present an attractive investment opportunity, the appointment of an experienced investment manager is critical. Robust asset valuation and management plays a key role in delivering investor return. Detailed due diligence at policy acquisition stage, effective asset valuation methodology, transparency of fees, approach to liquidity provision, efficient and thorough operational processes and acknowledgement of regulatory environment and tax implications should all be considered in the manager choice.

SL's Experience

SL has purchased over 70,000 UK TEPs and US Life Settlements since 1990. Entering the US Life Settlement market in 2003, we have subsequently managed or advised 20 Life Settlement portfolios purchasing over 2,200 policies with in excess of $300 million in maturity value collected for investors.

SL is authorised and regulated by the Financial Conduct Authority as an Alternative Investment Fund Manager (AIFM).  Investing in Life Settlements (thumbnail large)

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Latest News

BlackOak Investors LP SL's latest Life Settlement fund has produced annualised returns of 16.9% to end Dec 2019, with 88.4% of performance achieved through realised gains. Find out more about BlackOak Investors LP How to select a life settlement fund manager 10 key questions investors should be asking life settlement fund managers prior to investing. Find out more about How to select a life settlement fund manager With-Profit performance 2018 Our actuarial team summarises the latest performance of UK Life Company with-profit funds for year ending 2017. Find out more about With-Profit performance 2018


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