Catalyst Investment Group

November 19, 2008 08:25 ET

Catalyst Sees Investors Turn To Senior Life Settlements

LONDON, UNITED KINGDOM--(Marketwire - Nov. 19, 2008) - Independent Financial Advisers have been seeking new ways to mitigate investors' losses from the volatility of the equity market particularly when UK interest rates appear to be trending downwards and money on deposit is less attractive.

One asset class that appears to be becoming increasingly attractive to investors is Senior Life Settlements. These are second hand life insurance policies of Americans over 65 years of age, with a life expectancy of less than 15 years. There is now a competitive secondary market for US life insurance policies. US policy holders are now free to sell their policies in the open market, for normally well above the cash surrender value offered by their insurance companies.

The total market is forecast to expand from $13bn a year to $161bn by 2030 as the US population ages and more of the elderly chose to cash in their policies. This is according to Catalyst Investment Group which structures and markets products backed by Senior Life Settlements bought from insurance companies that are investment grade or better.

A well managed and diversified fund of Senior Life Settlements can offer an investment opportunity that is uncorrelated to standard bond or equity markets; this is because the policies are dependent on mortality rates rather than any underlying investment performance.

This market has attracted considerable interest from large investment banks, insurance companies, pension funds and hedge funds but Catalyst is supporting a drive to structure products for retail and institutional investors.

Head of Sales at Catalyst James Haupt says: "Catalyst is feeding the increasing interest in this asset class by signing up a number of major distribution agreements with numerous IFA Groups. We estimate that sales in those SLS products we currently distribute could reach Pounds Sterling 150m in the next 12 to 18 months."

"We will also shortly distribute the ARM Guaranteed Income Fund, issued by a Guernsey based protected cell company. This shall provide guaranteed annual payments of 7.75% (by Commerzbank AG) with a targeted repayment of 100% of invested capital at maturity."

The fund which will be listed on the Channel Islands Stock Exchange will invest in specially created notes issued by Commerzbank AG which reference Commerzbank's Vis Vitalis Life Settlements Index. This index tracks the returns of independently managed pools of traded life policies.

Haupt adds: "It is envisaged that this product will be invested through IFAs and will offer all the usual tax efficient wrappers such as ISAs, SIPPS and SSAS. We believe it will prove to be a perfect foil in these current markets."

Catalyst Investment Group also currently offers an Assured Income Plan and a Capital Growth Bond.

The ARM Assured Income Plan is an asset backed bond issued by ARM Asset Backed Securities S.A. a Luxembourg-based special purpose vehicle administered by Equity Trust, one of the world's leading trust and fiduciary services groups.

To generate its returns ARM invests in cash, cash equivalent assets and traded life policies. The Plan offers fixed income returns, paying 10% per annum, paid quarterly over a 10 year period and return of capital at the end of term. There are also seven and five year versions offering up to 8.25% and 7.5% respectively.

The ARM Capital Growth Bond offers up to 100% capital growth over a seven year period which is an equivalent annual return of 14.28%.

Contact Information

  • Brown Lloyd James Financial
    Robert Gibson
    0207 259 0503 / 07748 182234
    Catalyst Investment Group
    James Haupt
    0207 933 8750