Who is guarding your investment?

The secondary life insurance industry, life settlements, can be an irate beast to both investors and asset managers who leap in to the asset class with limited experience. 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.

 

Stephanie Nolan

 

  • Manager & Director of Global Insurance Settlements Funds PLC
  • COO & Director of GI Asset Management
  • General Manager and Director of LSI Management Limited

 

Web: www.gisfunds.com

Email:stephanie@gisfunds.com

LinkedIn:au.linkedin.com/in/stephanienolan

A Chartered Accountant with over 25 years experience in Investment Banking and Fund Management. She has held senior positions at Commerzbank (Asset Management), Deutsche Bank (Equities) and Solomon Brothers (Equities). She has been with the Group since the beginning of 2007, and has been instrumental in the development of the business since that time.

 

She is responsible for business development functions, portfolio management, risk management, finance, and operational infrastructure.

 

 

 

 

 

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

 

  • Director of GI Asset Management

 

Email:stephen.k@giasset.com

LinkedIn:au.linkedin.com/in/stephenknott1

Appointed Director in the Group, in 2004, with responsibilities for compliance and advisor services. Stephen has built a career of 40 years in the Banking, Insurance and Financial Service Industries. He has held management positions in banking, funds management and financial services corporations. He has had 10 years experience in the life settlements industry and has held insurance licensing for 20 years. During his time with Westpac Banking Corporation during which he served in the bank's International (Trade Finance), Commercial Lending, and Investment (Financial Planning) Divisions. Stephen has also lectured in International and Commercial Banking subjects for the then Australian Institute of Banking and Finance.

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.

 

Robert D White

 

  • Director of GI Asset Management
  • Co-founder Executive Vice President and Chief Operating Officer and a member of the Board of Directors of CMG Life Services Inc 

 

Web: www.cmglifeservices.com

LinkedIn:https://www.linkedin.com/pub/robert-white/79/a2/9a1

As a Director, he is specifically responsible for assisting in the acquisition and premium management of the Fund’s portfolio of Life Policies. His experience with alternative products, managed money, private placements, quantitative analysis and financial modelling is valuable in selecting policies and in managing pooled life settlement programs. Mr. White began his career as a Financial Advisor and Insurance Agent with the United States Planning Association and Independent Research Agency. His civilian experience includes positions as Financial Advisor & Insurance Agent, Portfolio Strategist, Bank Officer, Compliance Officer, and National Director of Marketing. He has held investment officer positions with two US regional banks, two private investment management firms, and a securities broker dealer. Rob is licensed with FINRA and the US Securities and Exchange Commission to offer investment advice on an array of investment instruments and products.

 

R. Laken Mitchell III

 

  • Director of GI Asset Management
  • Director of Global Insurance Settlements Funds PLC
  • Co-founder of CMG Life Services Inc. Chairman and President of the Board.

 

Web: www.cmglifeservices.com

LinkedIn:https://www.linkedin.com/pub/laken-mitchell/0/7b3/29a

A securities and corporate attorney who has been involved in the securities and investment brokerage industry since 1981. Much of his experience has been working with both public and private entrepreneurial companies, helping them to structure, market, and fund ventures in areas such as technology, real estate, oil and gas, timber, entertainment, life settlements, other insurance products and marketing. Mr. Mitchell has served as an officer and/or director of a number of investment ventures and other development stage companies. He also served as general counsel for an oil and gas syndicator for four years. Over the past 11 years, Mr. Mitchell and CMG have developed a number of mathematical models and analytical tools for selecting and managing life settlement policies and pools of policies. He has sought and analysed in excess of 40,000 policies and has been responsible for the initial due diligence on all policies selected by the Life Settlements Wholesale Fund.

 

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.

Stephanie Nolan (COO & Director)

Stephen Knott (Director)

 

 

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.

 

About CMG Life Services Inc

CMG has been one of the most active purchasers of life settlements having invested over $1.8 billion to acquire portfolios of life settlements with an aggregate face amount of over $6 billion, represented by more than 1,300 policies. Of the policies purchased, CMG also currently manages approximately 750 of these policies representing approximately $3.7 billion of policy face value. 

 

 

 

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.

Tags: About Us, Investment Team, Insurance Linked Investments

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