Fund being used by Asian and European family offices to unlock investment paralysis


Alex Lee

The struggles of fixed income instruments during the height of the pandemic in March and April 2020 raised questions about the widely accepted notion of negative correlation between bonds and equity.

Without fixed income instruments performing as the safe bedrock of portfolios, investment decision making processes at family offices seized up as markets offered little direction. This then kicked off a scramble amongst asset allocators to find suitable investments to step up as a stable non-correlated returns generator.

Laureola’s portfolio managers see growing commitments by Asian and European family office clients to its life settlements fund. Life settlements funds generate stable non-correlated returns through providing financing to individuals backed by those persons’ life policies.

“We observed life settlements being allocated to the fixed income portion of portfolios rather than in the alternatives portion by our family office clients.

“These sophisticated investors seek stable non-correlated returns in their fixed income portfolio. Non-correlation is important because they want these investments to perform independently of other risky growth assets. This in turn unlocks their ability to take risks in their growth asset allocations. Having that stability in returns cuts through the investment paralysis brought about by the volatile pandemic-era investment landscape,” said Mr Alex Lee, Melbourne-based Director at Laureola.

To that end, Mr Lee said, “The Laureola fund has been running for more than seven years and we have been generating stable non-correlated returns for our global family office clients. These family offices view our fund as a viable complement and, in some cases, a substitute for their fixed income exposure.”

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