Scottish Value Management (SVM) is launching an offshore fund investing mainly in traded endowment po...
Sam Batcharj, business development director at SVM, said: "With profit policies are generally seen as low risk investments because they are asset based and are backed by underlying investments in equities, bonds and property."
The fund will be managed by Brian Moretta who already manages an investment trust specialising in traded with profit policies. The Life Offices Opportunities Trust is valued at £36m and has generated a performance of 36.5% since its inception in March 1996.
Moretta said: "The [Low Risk Asset] fund will be diversified with the portfolio having a maximum of 20% in any one life office. There will be no preference towards life offices, though the fund will look at asset shares to assess relative attractiveness. Policies will be bought at market value. The current market policy discount rates are 10% for policies with five years to run and 11% for policies with 10 years to run."
In addition, the fund may profit from possible demutualisations and future corporate restructuring of life offices.
The Low Risk Asset fund is sterling denominated and has a minimum initial investment of the equivalent of $100,000, with £1,000 for additional investment.
IFA remuneration will be 3% initial commission with a renewal fee of 0.5%. The management fee is 1.25%. Liquidity is monthly and there is a 3% up-front charge.
SVM currently manages £700m of assets in a range of investment trusts, offshore funds, hedge accounts and segregated portfolios. The Low Risk Asset fund is the first of a planned range of IFA-distributed Dublin listed funds.
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