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| Fund Overview | Life Settlements are resold life insurance policies and can be thought of as a form of finance extended to an individual backed by the person's life insurance policy. This financing is repaid upon maturity by collecting the death benefit from the insurance company. Risk mitigation measures implemented by Laureola include science-driven due diligence of policies, active monitoring of insured through a vertically integrated operation, and investor aligned fund design. |
| Manager Comments | The AUD hedged feeder fund was flat in March. CYTD, it has risen +0.1%. The Fund's largest drawdown since inception of -4.90% vs the Index's -19.60%, in conjunction with its down-capture (since inception) ratio of -37.45%, demonstrates its capacity to significantly outperform in falling markets and emphasises the Fund's non-correlated nature. During the month, Life Settlement markets were relatively stable with transaction prices averaging in the 12% to 14% IRR range (gross, projected IRR) and the usual wide dispersion around this average. One small policy matured and 4 polices were added to the portfolio. The portfolio now has 188 policies with an average face of $710k. 37% of the policies have a Life Expectancy of 48 months or less. Maturities have been below expectation in Q1 but Laureola expect them to pick up for the rest of 2021. Laureola noted the impact of Covid 19 on the Life Settlement markets has been twofold: 1) increased mortality and 2) decreased supply of policies. They added that there is no exact measurement of the deaths caused by Covid but most reputable estimates centre around the 10% mark - i.e. there were 10% more deaths in 2020 than expected. Laureola believe Covid's effect is likely to decline in 2021 due to better treatment and the Vaccine rollout. 25% of Americans are fully vaccinated as of 17 April, the CDC estimates that it will be 50% by June 6 and 85% by August 15. |
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