Greater Returns & Diversification Through An Uncorrelated Strategy: Guest Speaker Steve Luongo

TL;DR

Learn about the basics of life settlements and how they offer non-correlated returns and diversification for investors.

Transcript

foreign my name is Andrea Hoke I am the director of investor relations at air Asset Management I am here with Ayers CIO Chief investment Officer Steve Luongo good afternoon everyone okay so we are here to talk to you all today about accessing greater risk-adjusted returns and portfolio diversification through an uncorrelated strategy so what does t... Read More

Key Insights

• 🛟 Life settlements involve selling life insurance policies to investors, providing them with an alternative investment option.
• 🛟 The market potential for life settlements is significant, with projections of around $233 billion.
• ↩️ Life settlements offer non-correlated returns, low volatility, and high risk-adjusted returns compared to traditional asset classes.
• 🛟 The impact of the COVID-19 pandemic on life settlements was minimal, with negligible effects on payoffs.
• 🦔 Investors can access life settlement funds through hedge fund structures with a minimum investment requirement.
• 🛟 Life settlements offer both financial benefits, such as reducing premiums, and social impacts, such as providing cash value for insured individuals' needs.
• 🛟 Life settlements contribute to responsible investing principles, offering a positive contribution to society.

Questions & Answers

Q: What is a life settlement and why do people sell their life insurance policies?

A life settlement is the transfer of a life insurance policy from the insured to an investor, providing immediate cash value. People sell their policies to reduce premiums, monetize their asset, or pay for various life expenses.

Q: How big is the life settlement market, and what returns can investors expect?

The life settlement market could grow to $225-$250 billion, compared to the current $20 trillion in life insurance policies. Investors can expect attractive returns with low volatility, outperforming traditional asset classes.

Q: How do life settlements complement an investment portfolio?

Life settlements offer non-correlated returns and low volatility, making them an excellent diversification option. Their risk-adjusted returns are superior to other asset classes, providing stability and potential growth.

Q: What is the social impact of life settlements?

Life settlements provide immediate cash value to insured individuals, helping them cover medical expenses or retirement savings shortfalls. Some policyholders also use the proceeds for charitable or environmental causes, adding a social impact element.

Summary & Key Takeaways

• Life settlements involve selling life insurance policies to investors, providing the insured with cash value and reducing premiums for the policyholder.

• The life settlement market has significant growth potential and could reach a value of $233 billion in a few years.

• Life settlement funds offer a non-correlated return profile with low volatility, making them an attractive addition to investment portfolios.