The low (and even negative) interest rate environment brought about by a combination of the residual effects of the GFC and the current COVID-19 pandemic has resulted in SMSFs seeking alternative investment opportunities to maintain their target returns.
Life Settlements
What are the benefits of life settlements for society?
Alignment with ESG principles is becoming imperative in investment management. A majority of Australians expect their super or other investments to be invested responsibly and ethically. In addition to the expectation of returns not being compromised, investors also expect these investments to have a real environmental, societal or governance impact, not just “ethics washing.”
What are the benefits of Life Settlements for the investor?
Investors in life settlements obtain a defensive asset that generates consistent stable returns regardless of market movements or changes in government economic policies. A 2013 study of gross projected IRRs in the life settlements market showed a range of 11.0 to 18.9% p.a. over periods of differing economic conditions.
What is a Life Settlements investment?
Imagine having the ability to benefit from the diligent financial habits of middle America.
This fixed income fund returned 13.1% p.a. over a 5-year rolling average
The Laureola Fund returned 13.1% p.a. over a 5-year rolling average with 100% of performance generated by realised gains in 2020, and more than 80% of returns were from realised gains over the eight-year life of the flagship fund.
Property investment versus investing in life settlements
Investors looking for income can find sustainable returns from life settlements without the costs and leverage of being a property investor.
Why family offices are comfortable with private debt
Family offices are comfortable with private debt/private credit in a way that retail investors are still to address in the search for consistent returns for the defensive part of the portfolio.
Concerns as income-seeking investors weigh risk
The yield on traditional fixed-income instruments such as bonds might no longer be attractive for the risk involved. Government bonds yield less than 2 per cent interest in most countries and are actually negative in most of Europe.