Managing Partners, a boutique fund manager specialising in investment in traded life policies, is opening an office in Singapore to exploit the potential it sees in offering its products t
Managing Partners, a boutique fund manager specialising in investment in traded life policies, is opening an office in Singapore to exploit the potential it sees in offering its products to institutional and high net worth investors in the region.
The firm says its Traded Policies Fund has delivered positive returns consistently, even over the past two years as other asset classes have made losses. MPL says the fund’s dollar institutional share class has returned 41.53 per cent since its launch in mid-2004 and 9.01 per cent over the 12 months to the end of August.
The fund’s sterling class has returned 28.76 per cent since its launch at the end of July 2005, and 10.02 per cent over the past year, while the euro share class has returned 24.08 per cent and 9.49 per cent respectively over the same periods, MPL says.
According to the firm, institutional investors and pension fund managers had invested around USD303m in five of the top European traded life policy funds up to November 1 last year, more than double the USD145.75m total a year earlier.
The Traded Policies Fund had USD118m in assets under management at the end of July after attracting GBP38m during the first seven months of 2008, and MPL says it has mandate pledges totalling a further USD135m for the next 12 months.
Traded life policies are US-issued whole of life assurance policies sold before the maturity date to allow the original owner to enjoy some of the benefits during their lifetime. The policies are purchased at a discount to their maturity value, which in the majority of cases is fixed at the outset, which means that they are guaranteed to rise in value, MPL says. The market has grown from USD50m in 1990 to more than USD20bn at the end of last year.
According to the firm, while traded life policies carry the risk that it is not known when the people whose lives are assured will die, with the right diversification and actuarial analysis funds can deliver steady, predictable returns. Because of this high degree of certainty and solid underlying value, products that invest in them can use a substantial degree of gearing to enhance returns and initial allocation rates.
Ahead of the opening of its Asian office, MPL has registered the Traded Policy Fund with the Monetary Authority of Singapore, the industry regulator and will mark its launch with an investors’ conference in Singapore next week.
‘We chose Singapore because it is a sophisticated financial centre at the heart of Asia and an ideal location to expand the marketing of our products in the Far East,’ says managing director Jeremy Leach.
‘The region has been less affected economically by the credit crunch than Europe, but has experienced the same negative sentiment in equity markets, and Asian investors – not least the increasingly significant sovereign wealth funds – are seeking alternative investment strategies. Now is an extremely good time to launch in Asia.’
MPL’s office in Singapore will be headed by Simon Cooper, who has spent the past three years in a sales role for London-based boutique fund manager Welbeck.
