Bermuda-based fund investing in US life insurance policies launches in Australia

From

Laureola has launched its Life Settlements Fund into the Australian market. “The underlying assets are US life insurance policies and everyone knows how life insurance works and why there is a guaranteed pay-out from the Life Insurance Company. There’s room for growth: the US life insurance market is currently USD 20 trillion,” said Tony Bremness, Founder of Laureola.

The fund manager invests in life insurance policies which it buys from the owner and pays the premium until the insured person dies. The Fund then collects the pay-out from the Insurance Company. Laureola maintains that its business is win-win for both buyers and sellers of the policy because it pays 2-3 times more to the policy owner than they would receive from the issuing Life Company.

“People relinquish their life insurance for many reasons including that the family has grown up and mortgage paid out so the need for life insurance is diminished or circumstances mean they can no longer afford to keep the policy.”

“Interestingly, 85% of life policies in the US are cancelled by the insured, who are unaware of the Life Settlement option,” said Mr Bremness.

The projected return of the Fund, based on the IRR of the underlying assets, is 8%-12% and it has a near zero correlation to equity markets.

Laureola has USD 73 million under management. USD 65 million is in its Bermuda-based Master Fund, which is fully regulated by the Bermuda Monetary Authority. Bermuda hosts the third-largest insurance market in the world (including non-life).

Laureola’s Bermuda Fund has been investing in Life Settlements since April 2013. Laureola believes that its Life Settlements Fund is a credible Fixed Interest alternative, because a well-managed portfolio of Life Settlements can provide:

  • Low correlation (nearly zero) to equity markets
  • Regular income
  • A risk profile similar to Fixed Interest
  • A return profile between Fixed Interest and equities
  • Returns well ahead of inflation

The locally based Laureola director, Alex Lee, also sees strong potential for the Fund in the Australian market as SMSF trustees, self-directed investors and Family Offices seek higher returns from their Fixed Interest assets.

Investment chart

You must be logged in to post or view comments.