US life settlements specialist Laureola Advisors has opened a local office and appointed a distribution head to run the new business.
The boutique asset manager has hired Nathan Wares to expand the fledgling asset class.
Wares has more than 25 years plus experience in funds management, investment banking, financial markets, and private banking.
During his career, he has held senior roles at Citigroup Asset Management as vice president of sales, ANZ Investment Bank as director of equity capital markets, and a director of Westpac and St George private banks.
He has also worked at Fidante Partners, Zurich, and BT Financial Group.
"Nathan is a valued appointment for Laureola as we expand from our initial discussions in Australia with investors and family offices. No other asset in the current marketplace is uncorrelated to the wider financial markets and we expect strong interest from super funds, institutions, and cashed-up SMSFs looking for alternative defensive assets," he said.
Wares added that the Laureola Australia Fund is specifically designed for private clients and small to medium-sized family offices which are looking for assets that are uncorrelated with equities or bonds and have a stable return.
A life settlement describes the transaction where an insured person sells a life insurance policy to an investor for a cash sum; the investor takes over the obligation to pay premiums on the policy and collects the death benefit when the insured eventually dies.
"Life settlement funds pay policyholders three or four times the amount offered by the issuing life company to surrender the policy," Wares added.
"A well-structured fund of life settlements that derives its returns from maturities is expected to deliver positive returns in all market conditions."
In the US, Wares went on to say, about 85 percent of insurance policies lapse.