Elizabeth Johnson
The Company
Asset Life Pty Ltd holds an Australian Financial Services Licence No. 317860.
Why Life Settlements?
Asset Life made the following observations:
That traditional asset allocation is under challenge in Australia with new asset classes that require new ways of thinking and the focus shifting to serve investors’ real needs.
That setting your clients’ asset allocation is one of the most important decisions made for them. This decision underpins a large part of the future portfolio return and the chances of your client meeting his or her investment objectives.
That advances in technology and the understanding of asset markets, as well as a far more diversified universe of asset classes to choose from means that Modern Portfolio Theory needs to be applied in new ways.
That a typical ‘real diversity strategy’ would include the following asset classes with no more than 15% of the risk coming from any one of these:
- Australian equities
- International equities
- Property
- Fixed interest
- Credit
- Commodities
- Private equity
- Absolute return
- Infrastructure
That from a client’s perspective the ‘real diversity strategy’ offers the same expected return, a lower expected volatility and, most importantly, a much lower expected probability of a negative return.
That traditionally, financial markets are slow to react to opportunities.
That taking a fresh look at asset allocation could mean breaking away from the 70% growth and 30% income assets model.
And that is why Warren Buffet and many of the world leading financial institutions are utilizing the intrinsic value of life insurance as an asset class known as Life Settlements.
In plain language, a life insurance policy is an asset which is owned by an individual, like real estate, a car, stocks or any other asset or investment. This life insurance policy may be sold just like any other asset as long as that life insurance policy is sold in accordance with applicable laws pertaining to the United States of America. The transaction is known as ‘Life Settlements’
The seller can turn their life insurance policy into funds today. These funds can be used in any way they like. Life Settlements are a "win-win" situation for both the buyer and the seller. The seller receives cash they need today to help with their current financial needs and in return the investor receives cash in a reasonably determinable period.
Life Settlements as an alternative investment:
- fall outside the traditional investment classes of shares and fixed interest
- have drivers of return which are generally independent of the price performance of the broad listed markets
- provide a pattern of return that complements traditional asset classes
- are often designed to deliver a positive return regardless of the investment climate
Asset Life’s alternative investments are a result of our commitment to the research and development of new investment opportunities for the benefit of our clients. Asset Life alternative investment solutions team is focused on sourcing and delivering attractive investment strategies outside traditional asset classes.
We believe there are sources of risk other than market risk that should be included in investment portfolios as part of the natural process of diversification. Alternative investment solutions provide the opportunity to seek sources of risk/return other than market risk/return
