The performance of traded life settlement vehicle Assured Fund at a time of unprecedented volatility is attracting major institutional interest, according to fund manager Policy Selection,
The performance of traded life settlement vehicle Assured Fund at a time of unprecedented volatility is attracting major institutional interest, according to fund manager Policy Selection, with inflows tripling from USD55.3m in 2006 to USD167.1m last year.
From a total of USD138.8m at the end of 2006, the fund grew to USD330.7m last year and now stands at some USD384m. Since the fund was launched in late 2004 returns have been 10.18 per cent for B class, which are aimed at individual UK investors, and 10.11 per cent for C class shares.
Interest from discretionary fund managers has helped to boost the fund’s gross asset value, which now stands at USD726m and is on course to reach USD1bn by the end of this year, according to Policy Selection.
Investment director Mark Hindle says investment in the Assured Fund by hedge funds is continuing to drive the fund’s growth in 2008. ‘We are seen as a safe pair of hands in a climate where equities look poised to go into freefall,’ he says.
‘Rates of investment into the fund are little short of astonishing, but when you look at our annual growth and returns, it is not surprising. Where else are you going to get a steady 10-plus per cent, year on year, in today’s market?’
The Assured Fund invests in US life assurance policies sold on the second-hand traded market by elderly US citizens, typically aged between 75 and 85. As with similar products in the UK, the US-based policies carry a guaranteed death benefit as the sum assured. When the policyholder dies, the fund receives the sum assured.
The fund is available for investment in the UK through independent financial advisers, who receive 4 per cent commission. The minimum investment in class B shares is GBP10,000, with further investments possible in increments of GBP1,000. The management fee ranges from 0.75 to 2.25 per cent, depending on the share class.
Policy Selection, a private limited company registered in the Cayman Islands, was established in 2003 to specialise in investment in the US senior life settlement market and has some USD379m in assets under management. The Assured Fund is an independent company with its own board of directors and is audited by PricewaterhouseCoopers in the Isle of Man.
