Life settlements open to Aussie investors
Life settlements might seem like an unconventional asset class – but an Australian fund manager claims the sector poses a fresh set of opportunities for local insto investors.
Investing in life settlements, particularly in the US, involves buying out life insurance policies and according to Asset Life responsible manager Ron Board, is experiencing a boom similar to that of the reverse mortgage market.
“Many US baby boomers are getting to an age where they would like to access the equity they have in their life insurance policies. Unfortunately, should they seek to cash in the policies they receive only a fraction of what the policy is worth,” said Board.
This in turn, has led to the creation of a secondary market for the policies, claims Board.
“While life settlement is very much an untried market for most Australian investors it has attracted billions of dollars of investment from around the world.”
The Queensland based firm has developed a protocol to enter the $160 billion US life settlements market. The firm believes that life settlements present an alternative investment platform for institutional investors looking to diversify following jitters in traditional asset classes.
“Asset Life, through our US structure, has access to large volumes of policies that they can target in order to meet the purchasing parameters of investors,” he said.
Source: Financial Standard
