1 / 20

DEFINED BENEFITS FUND ACCELERATED CLASS

DEFINED BENEFITS FUND ACCELERATED CLASS. Overview. Markets today Unknown risks Needed opportunity to overcome market concerns 21 st Century replacement for With Profits. Today's Presentation. An overview of Traded Life Policies (TLP’s) as an asset class What are TLP’s?

griffith-trujillo
Download Presentation

DEFINED BENEFITS FUND ACCELERATED CLASS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DEFINED BENEFITS FUND ACCELERATED CLASS

  2. Overview • Markets today • Unknown risks • Needed opportunity to overcome market concerns • 21st Century replacement for With Profits

  3. Today's Presentation • An overview of Traded Life Policies (TLP’s) as an asset class • What are TLP’s? • Why TLP’s are an important asset class • Why people sell their policies • The TLP market place • How TLP’s are purchased • How TLP’s are valued within a fund

  4. What are TLP’s? • United States Issued Life Assurance Policies • United Kingdom Issued Endowment Policies • Policy purchased at discount from fixed maturity value, generating guaranteed profit when the policy pays out

  5. Example Holdings  Axa  Clerical Medical  Commercial Union  Sun Life  American General Life  Norwich Union  Prudential  John Hancock Life  Standard Life  Pacific Life  Friends Provident

  6. Important Asset Class? • TLPs offer a fixed return to the investor • Unaffected by other investment fluctuations • Returns in the fund are extremely smooth • Natural maturity point eliminating the need to find a future buyer • Net historic returns 9% p.a.

  7. Market Today • Policies purchased from those aged 65 or over • More accurate and finite life expectancy tables • Policies in force two years plus – beyond contestability • Regulated market maker gives competitive pricing and protects buyer and seller

  8. Why do people sell their policies? • Estate planning • Change original beneficiary • Strip out accumulated value to provide income replace with cheaper term • Key-Man • Premiums no longer affordable

  9. Market Growth • ----------- 1990 $50 million • ------------ 1999 $ 1 billion • ------------ 2001 $ 4 billion • ------------ 2006 $12 billion Issued US Life Policies $13,000 billion

  10. How are TLP’s purchased? • A life expectancy (LE) is obtained • Illustration made to establish future premium liability • Offer made for policy – US law requires 3 offers before a policy is traded

  11. Next Step • Funds deposited in US based Escrow Account • Life Assured, Policyholder and Beneficiaries sign transfer • Policy transferred to new owner • Funds released from Escrow to the seller • Insurance Company notes new beneficiaries and purchase is complete

  12. Calculations • Establish life expectancy (LE) • Calculate future premium liability • Create an actuarial model to unwind future profits

  13. Example of Policy Selected for Fund • LE 64 Months • Sum Assured $1,000,000 • Purchase Price $ 629,215 • Includes Premium to LE $ 97,275 • Net Purchase Price $ 531,940 Return 58.93% 81 Year old – New York Life.

  14. Life Expectancy Annual Premium $ 18,239 Expected Return $370,785 • Months • Low LE 54 • Average LE 64 • High LE 74 Annual Return 13.10% 11.05% 9.56%

  15. Open Ended Investment • Aurora is an open ended investment • Flexible investment term • Shares redeemable upon demand • Monthly fund valuations provided • Regulated mutual fund

  16. Disaster Scenario! • Annual Premium $18,239 • Population LE 110 months • LE x 2 128 months Annual Return 4.69% Annual Return 3.53%

  17. Invest • USD class minimum $10,000 • 110% allocation from day one $11,000 invested • 7 Year investment recommended - (No exit charges after 7 years) • 1.25% p.a. management charge • Target 7 – 9% annual growth

  18. 10% EXTRA ALLOCATION • INVEST $50,000 • DAY ONE BECOMES $55,000 • YEAR END TARGET MINIMUM • 17%

  19. HOT OFF THE PRESS! November 2007 - Annual return 9.35% Investor with enhancement and $100,000 Return at end of First Year 20.3%

  20. AURORA Should you have any questions or require any further information please contact: PCP Support Tel: +357 25817488 Fax: +357 25749755 Website: www.pcpfunds.com Email: support@pcpfunds.com

More Related