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Long Term Growth Performance Report February 2018

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As we continue to follow global investment inflows across multiple asset classes one clear star is emerging – Private Equity. Growing against the backdrop of an increasing number of institutional investors - pension funds, sovereign-wealth funds, endowments and family offices pouring their money in search for a higher yield, private equity funds have amassed an impressive $963.3 billion of, so called, dry powder. While institutional investors are getting increasingly more willing to lock-up their money for the longer periods of time, private equity, on the other hand, is having difficulties to redeploy capital raised. There are multiple reasons including uncertainty towards the trajectory of the interest rates, recent announcements from US on slashing international trade deals, market volatility and perception that assets in general are somewhat overpriced.

Such dead cash inevitably creates a drag on the portfolio’s performance and goes against the very reason of private equity investment for most institutional clients, especially pension funds – yield enhancement and removed necessity to reallocate millions of dollars in income receipts. Such situation with private equity funds limits investor’s pool of alternatives even further.

Life Settlements close-end funds, on the other hand, possess a unique feature allowing them to redeploy capital raised within a short period of time, typically months, removing the cash drag on the portfolio performance.

On the other hand, they provide flexibility and continuity allowing institutional investors to stick to the well-performing asset class for longer periods of time while diversifying their investments through multiple vintage years.

Finally, an increased policy supply driven by favourable demographic trends and technology innovations assures for the continuous investment opportunity within the Life Settlement space.

We hope you enjoy this month’s industry updates while we are getting ready for this year’s fund industry award participation.

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