Using Life Settlements with Other Assets
Hello, this is David Mickelson from Mickelson Capital Consulting.
Today’s topic is going to be using life settlements with other assets in a single investment,
that combines the stability and predictability of life settlements with other asset classes that
might be more volatile and less secure. The idea being that the investors may very well feel
more secure with either a credit enhancement concept, or a return of capital concept provided
by the certainty of life insurance policies that will ultimately pay off, combined with possibly
more risky and more volatile asset classes. Some of the things that have been paraded through
our office are municipal bonds, factories in all sorts of municipalities, even foreign, paper mills,
and different funds like PIPE funds, distressed debt funds, and distressed real estate funds.
So the promoters of these programs are combining these other assets with life settlements,
and then they are trying to get financing, and they’re trying to get investors by using the
fact that life insurance is such a secure asset that it removes many of the risks uncertainties in
the long run for investors and for lenders. That’s the latest and greatest development in the life
settlement industry. We predict that while these deals are hard to put together, and they are very
odd right now, they’ll become more the norm in 2009 at the end of the year and then again they’ll
grow in prominence in 2010, maybe even beyond.
Thank you for your listening. This is David Mickelson at Mickelson Capital Consulting.