We strive for excellence. Our tight knit team of highly qualified professionals are passionate about servicing our clients
Our success is due to the specialist skills and experience of our knowledge-based teams and professionals together with our reputation for innovation and strong corporate governance.
Operating from our headquarters in the UK, we work globally with institutional and corporate clients to deliver a comprehensive range of lowly correlated investments utilising innovative fund structuring solutions.
We offer clients access to alternative assets aimed at delivering strong and stable returns, resilient to high-profile market corrections, whilst protecting capital values.
Our clients’ investment objectives are paramount. We adopt a collaborative approach – fully understanding a client’s objectives prior to designing suitable strategies and appropriate investment vehicles to deliver investment performance.
INSURANCE LINKED INVESTMENT STRATEGIES
Insurance linked investment strategies encompass a broad range of investment positions, markets and risks. The primary issuers of new insurance product to consumers and corporations are typically insurance companies – well established, capitalised and highly regulated institutions.
Insurance linked investments are created when the risks and obligations associated with a primary insurance contract are transferred to a secondary investor. The transfer of this risk can happen in different ways:
For example, an insurance company looking to transfer risk from a book of their existing business to a secondary investor. This would typically happen in the form of reinsurance, a swap or bond.
Secondary investors active in macro markets are almost exclusively institutions such as insurers, pension/hedge funds, asset managers and family offices.
For example, an individual/business looking to sell their insurance contract to a secondary investor. This would typically happen in the form of the legal transfer of the insurance contract from the original holder to a secondary investor.
Again the secondary investor is typically an investment fund or institution looking to construct a portfolio of such contracts.
Types of Risk
The types of risks that can be transferred in an insurance linked investment take many different forms:
- Longevity and mortality risks such as those associated with life insurance and annuities. For example a US life settlement – where an individual sells their life insurance contract onto a secondary investor. The secondary investor pays the future premium commitments due under the contract, and in exchange receives the benefit upon maturity.
- General insurance risks such as those associated with the protection of real estate, infrastructure, vehicles & businesses. An example of this type of transaction would be a catastrophe bond, where an insurer wishes to limit its exposure to a catastrophic event, such as a hurricane, by issuing a fixed term bond to a secondary investor. Repayment of principle would be contingent upon the catastrophic event occurring.
- Investment risks structured within consumer insurance contacts – for example fixed term endowment policies. The individual sells their contract for a one-off payment in the secondary market. The secondary investor continues to pay any premiums contracted under the policy, collecting the proceeds upon maturity.
SL has over 30 years of experience working with institutional investors to create bespoke alternative investments specifically tailored around Insurance Linked Strategies.
Case Study 1
Closed ended fund launch
SL engaged with a Canadian based consortium in the development of a closed-ended alternative investment fund investing in insurance assets.
SL brought over 2 decades of experience specialising in secondary insurance markets, with a deep technical understanding of how to best optimise investor value through targeted asset pricing\acquisition and actuarial modelling of anticipated cash flows. SL offered its efficient, diligent and robust asset management processes, together with an established network of third-party servicing agents to engage as required.
The Canadian partner brought extensive experience operating within global capital markets, structuring and management of investment portfolios, investor relations and capital raising within the institutional and HNW investor space.
Creation of a Canadian Limited Partnership offering North American institutional and HNW individuals a fixed term investment in a highly selective portfolio of US and Canadian Life Settlements.
The first fund launched in 2013. The partner acting as the fund promoter and investment manager based in Canada, with SL maintaining the remit as the specialist investment advisor and manager of the Life Settlement portfolio. A second fund was successfully launched in 2018.
Case Study 2
Open ended fund launch
SL engaged with an Asian based partner in the creation of a bespoke open-ended US Life Settlement investment, initially tailored towards HNW private investors; with a view to extending the offering into the broader Middle East, European and Asian markets.
SL brought extensive experience and knowledge of applying low cost structuring solutions for start-up portfolios, where keeping set-up costs and initial running expenses low is an essential part of protecting initial investment capital and providing the best opportunity for long term sustained growth and success. As an FCA regulated Alternative Investment Fund Manager, SL has a long and successful history of operating within the highly regulated UK financial sector.
The Asian partner brought a wealth of experience from operating in private equity and capital markets in Asia\Europe, especially in relation to introducing investors to niche investment opportunities with low correlation to traditional capital market investments.
Creation of a UK Limited Partnership offering global institutional investors and HNW individuals access to an open-ended investment in a highly selective portfolio of US Life Settlements.
Launched in early 2014, maintaining a meticulous and disciplined investment strategy, the SL team has built a highly diversified and optimised portfolio of US Life Settlement investments.
Through the continued development of new working partnerships in the Asia, Europe and the Middle East, the fund has doubled in size during 2020, whilst delivering steady and reliable investor returns.
Case Study 3
Administration & Servicing
SL were approached by a European asset management company seeking specialist administration support for an existing portfolio of US Life Settlements. The asset management company was seeking a strategy to realise best value for investors with a medium to long-term timeframe.
SL brought over 2 decades of experience in delivering effective administration solutions for insurance assets, ensuring that individual policies are efficiently and carefully maintained and kept in force to the point of maturity claim or sale. SL’s access to US service partners coupled with its in-depth knowledge of tertiary markets – where existing portfolios trade with one another – allowed sale opportunities to be identified where appropriate to maximise investor value.
The European partner brought a mature portfolio of US Life Settlements, held within established structures, along with an existing network of investors.
Creation of a UK based service offering to ensure that sufficient liquidity was maintained to continue to service the Life Settlement portfolio, and policies remained in force to maturity or sale. Ongoing premium costs were minimised for investors through specialist ‘best in class’ premium optimisation techniques honed by SL over the years.
Around half of the portfolio has been successfully realised to date, with the balance of the portfolio on target to be realised in the coming years.