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Get to Know Your Investment Manager

Get to Know Your Investment Manager
11/07/2016Author: GI Asset Management | Blog

The secondary life insurance industry, life settlements, can be an irate beast to both investors and asset managers. We see this in the litter of negative headlines exposing illegal behaviour and incompetence’s of some asset manager. But as the industry grows and matures we see investor’s succeed and asset managers prolong their existence. Asset managers are continually adapting to the changing regulations and valuations and a bright future is ahead for the asset class.

Some investors see multi-asset managers, with numerous fund options, as highly experienced and others may feel that boutique managers with a single focus have boundless experience and are capable to significant success.  One team might do a great job, and one team might not. Varying traits may be the cause of this but individual personnel experience has a key role to play.

The industry has unfortunately been characterised by frequent business entity changes and staff turnover within organisations.  In contrast GISF’s underlying managers have each been in unbroken business for over 10 years with low staff turnover.

This piece will introduce you to the key personnel involved in the everyday management of Global Insurance Settlements Funds PLC (GISF). Reviewing their experiences and sharing what they have learned managing this alternative investment. In addition to the management below the company has three non-executive directors, two of whom are independent directors.

GI Asset Management

Stephanie Nolan

stephanie

More About Stephanie

What have I learned?
  • Traditional asset class thinking doesn’t apply to this asset class. My views have changed and developed with experience.
  • Be patient. Cash flow in the early years of a new portfolio should rightly be expected to be small. The real returns come from holding to maturity.
  • Don’t make simplistic assumptions and find an experienced player who is willing to point you in the right direction and make investment tailored to your strategy.
  • Modelling and analysis is essential in sorting the assets on a policy by policy basis for their economic value and robustness to variable mortality assumptions and variable cash flow assumptions.
  • Ensure you retain control and visibility on your assets. Get quality reporting and service from your providers. Most operational issues occur as a result of cash flow management issues when timing is miss-estimated.

Stephen Knott

stephen

More About Stephen

What have I learned?
  • Embrace the characteristics of the asset class (Lack of Correlation, Risk/Reward proposition to name a few) and manage it accordingly.
  • It can take years of progress to develop accurate management techniques so it is essential that the fund manager has been operational long enough to have learned how to develop the optimum strategy for you. An experienced player will be able to successfully mitigate risks commonly associated with the asset class.
  • A little actuarial expertise is essential as you need to be prepared to do a lot of modelling in order to understand and manage risks, and to have realistic expectations of your portfolio.
  • Benchmarking is difficult. For instance, it is at best unhelpful and at worst dangerous, to assume a higher headline return is better than a lower return unadjusted for relative risk.
  • Ensure you are satisfied with the internal valuation processes used. Different managers use different valuations processes making it difficult to make exact comparisons between policies let alone entire portfolios.
  • If you are a Non-US investor you will need a substantial commitment to housing your new portfolio in an appropriate structure that will not result in unnecessary tax leakage.
  • Although it appears to be a simple asset class there are many hidden opportunities and as well as risks.
 

As always we wish you well with your life settlement investment and if you want to learn more about investing in this asset class please contact.

About Global Insurance Settlements Funds PLC (GISF)

Global Insurance Settlements Funds PLC (GISF) is incorporated in Ireland as an umbrella type investment company with segregated liability between sub-funds. The first sub-fund launched, GIS General Fund (the Fund), is listed on the Irish Stock Exchange.

This structure is aimed at Sophisticated / Institutional investors and provides tax clarity by ensuring there is no tax leakage. It enables a number of different investment options to suit the specific needs of our investors.

The Fund’s core activity is to actively manage a large and diverse portfolio of life insurance policies (life settlements) issued by companies in the USA. Policies are sourced by licensed U.S. Provider companies and the Board of GISF select those that best meet the Fund’s policy purchase criteria.

Disclaimer: This information is intended for qualifying investors only and was correct at the time of preparation. It has been prepared to provide general information only and should not be considered as a “securities recommendation” or an “invitation to invest” in any jurisdiction. Potential investors should consider the relevance of this information to their particular circumstances. Before proceeding investors must obtain the prospectus and take their own legal and taxation advice. If you acquire or hold one of our products we will receive fees and other benefits as disclosed in the prospectus and relevant offering documents.