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Long Term Growth Performance Report April 2018

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A WORD FROM THE MANAGER

Spring is in full swing and with it busy period of year-end reporting from market participants. While volatility in both interest-rate and equity markets remains our attention this month is focused on some of the less comforting reports from the pension fund’s universe. Looking at the global scale it comes rather unsettling that pension fund’s funding levels have been steadily decreasing while actual performance has proved far from stellar. It seems that market players acquire growing sense of urgency to adopt their strategies to the new market realms. Aside from the fact that investment returns often fell short from the built-in assumption, another primary reason for an increase in funding gaps over the last few years is investment market volatility. It is in that sense that Life Settlement’s limited correlation to traditional as well as some of the private financial markets represents an attractive opportunity to pension fund allocators.

To help embrace such opportunity, some of the regulatory authorities including FINMA, Swiss-based regulator, nowadays allow for an extension to the maximum threshold applicable to the alternative investments.  Life Settlements can provide stability of returns, downside protection during financial turmoil and absolute returns when needed most.  Many Pension Fund managers are recognizing these variables and are allocating to Life Settlements.  The Pension Fund community is accepting that due to the nature of pension fund liabilities, a short term, highly correlated investment strategy is not optimal, but that they best take a longer term absolute return strategy, in order to better pension fund’s future obligations. We look forward to bringing you this month’s positive news and remain confident in our capacity to deliver sustainable uncorrelated returns.

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