Life settlement company shares why there is no better time to invest, as market conditions open a brief window of opportunity to acquire assets at historic lows.
Online PR News – 01-July-2009 – – SAN DIEGO, CA – Mickelson Capital Consulting (MCC), a registered investment advisory company and creator of alternative investments, announced today to investment advisors that it is now a buyer’s market for life settlements (LS). The boutique firm specializing in life settlements says there is no better time to consider LS and shares the reasons why market conditions are creating a brief window of opportunity for increased returns. MCC says the U.S. senior life settlement market is sparking international interest, innovation among European institutions.
"LS is a very attractive asset due to the potential for strong double digit returns backed by investment grade (A- or better) credit quality. They are uncorrelated to other investment classes and a great diversification asset to own, and now is the time to act," said MCC President, David Mickelson.
Current Market Conditions Create Window of Opportunity for LS Investors
As a result of the following factors, MCC says investors are able to acquire life settlements at very aggressive rates, which is a key driver of strong returns.
1. Fall out from the financial crisis – In late 2008, capital at major institutions evaporated while banks scrambled to shore up balance sheets reducing activity, including the purchase of life settlements.
2. Change to the tables that calculate life expectancies – Recently, life expectancy projections on average were increased, which had a significant impact on calculation of investment returns.
3. Distressed Portfolios – Many funds and investors find themselves with insufficient capital to maintain premium payments.
4. Supply of policies exceeding demand – With less money available, investors have become much more selective and are in a position to 'cherry pick' the best policies.
"The LS market rallied from 2005 until late 2008 when it hit the breaks along with the rest of the investment community. Investors now see a window of opportunity for increased returns given current market conditions and rates. Right now it’s a buyers market. There is no better time to consider the opportunity," added Mickelson.
MCC projects as more money comes in to the market and inventory is acquired, supply and demand will balance out and pricing will go up. The life settlement broker urges investors to make inquiries now while market conditions are optimal.
Life Settlement Market Conditions Spark International Interest, Innovation
International interest in life settlements is high. According to MCC, European institutions are sophisticated and active in this space, and are driving the rapid development of emerging new insurance and longevity linked asset classes. Major institutions like Credit Suisse and Deutsche bank are driving innovation including the first synthetic products, which allow for the investment in a product whose return is driven by the underlying asset class without actually taking ownership of them.
Derivatives like these remove the need for extensive due diligence and the expert life insurance knowledge necessary to evaluate a policy, making the asset class accessible to a wider audience. MCC cautions that this convenience does come at a cost to absolute return but for an investor whose primary goal is diversification or consistency (not maximizing return) it is a good potential option.
"This is still a young asset class with great potential and it is maturing rapidly. Investors are becoming much more savvy and realize that in order to invest wisely, it is essential to work with a company that has in-depth knowledge of life insurance. Having been in the life insurance industry since inception, our experienced team at MCC understands the legal complexities around due diligence to ensure a policy is in good standing and knows how life insurance contracts work, which are both critical to ensure that LS investments pan out," said Mickelson.
About Mickelson Capital Consulting:
Mickelson Capital Consulting (MCC) is a registered investment advisory company and creator of alternative asset class investments in the areas of life settlements and PIPEs (Private Investment in Pubic Equity). The firm provides customized investment solutions that are designed to build and protect the wealth of its clients and registered investment advisor (RIA) partners. MCC’s reputation is grounded in its commitment to providing high-quality, 'hands-on' customer service. MCC also has established relationships with an extensive network of RIA’s, investment bankers, fund managers, lawyers and CPA’s. For more information on life settlements contact 1-800-700-4450 or visit http://www.mickelsonlife.com.