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Investors Fill New Carlisle Fund: Life Settlement Update

By Allison Bell

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Carlisle Management Company SCA says it has raised $290 million for a closed-end fund that will invest in in-force life insurance policies.

The Luxembourg-based company had originally set a funding goal of just $250 million for the new life settlement fund.

(Related: IRS Clarifies Life Settlement Rules)

The investor pool for Luxembourg Life Fund: Absolute Return Fund II FCP RAIF includes institutional investors from the Middle East and Asia as well as from the United States and Europe, Carlisle says.

The new fund will invest in several hundred in-force life insurance policies. Managers say they will try to build a diverse pool of policies, with the policies having different death benefit levels, insurance carriers, insured ages and insured mortality profiles.

Life settlement industry players call the market for deals involving consumers and the life settlement providers that buy their life insurance policies the secondary market.

Industry players call the market for deals involving life settlement providers and investment funds the tertiary market.

Carlisle and other companies that run life settlement funds say the products give investors a way to invest in assets with returns that are correlated with mortality rates, rather than with stock prices or interest rates.

Jose Garcia, the chief executive officer of Carlisle, said in a statement about the new life settlement fund that a “current temporary lack of liquidity” should soften the tertiary market, and help the fund buy policies for relatively low prices.

“We believe that closed-end life settlement funds represent a solid hedge, particularly within the context of the ongoing COVID-19 pandemic,” Garcia said.

In other life settlement community news:

Wm. Scott Page, Atlanta, has introduced PolicyAppraisal.com, a website that can help financial advisors and life insurance agents find the resale value of in-force life insurance policies.

The site, which uses the firm’s Value Finder software, first asks a user a series of questions to determine whether a policy can be sold on the secondary market.

Financial professionals who visit the site can use a built-in text messaging tool to get fast answers to questions.

Berkshire Settlements Inc., Atlanta, a family-owned life settlement provider, says it has received a license to operate as a life settlement provider in Florida.

Berkshire now has the approvals it needs to buy in-force life insurance policies in 42 states.

LXC Life LLC, Boca Raton, Florida, has entered the life settlement community as a life settlement marketing organization. Chris Orestis, a longtime life settlement community participant, is the founder. The firm has set up the LifeCare Xchange, a platform that can connect would-be policy sellers directly to life settlement providers, without the use of a life settlement broker.

LXC Life says that consumers’ life insurance agents can get fixed referral fees based on the face value of the policy.

Agents do not need any special licenses or extra errors and omissions insurance to use the new platform, according to LXC Life.

American Life Settlements Inc., Carmel, Indiana, says it now has achieved registered trademark status for the “American Life Settlements” name.

The life settlement brokerage has been in business since July 2000.

The U.S. Patent and Trademark Office has put the company trademark in the category for “Financial services, namely, insurance policy brokerage, settlement, and loan services.”

The Life Partners Inc. Position Holder Trust as hired NorthStar Life Services LLC, Irvine, California, to provide customer service and accounting services for its life settlement portfolio.

NorthStar has built a 4,000-square-foot office building in Waco, Texas, to support the servicing arrangement.

NorthStar Life Services helps institutional investors and other investors manage portfolios of life insurance policies.

Lighthouse Life Capital LLC, Conshohocken, Pennsylvania, has hired Phoenix American Financial Services Inc., San Rafael, California, to handle back-office support for its life settlement operations, including the Lighthouse Life Beacon Bonds program. The Beacon Bonds program give investors a way to buy bonds backed by Lighthouse Life Capital’s ability to generate revenue by acting as a life settlement provider.

Phoenix American has been helping companies manage alternative investments since 1972, using the company’s STAR-XMS transfer agent system.

Harbor Life Settlements, Austin, Texas, conducted a national survey of 1,702 U.S. adults and found that 70% of the survey participants said they had life insurance.

About 43% of the survey participants who had life insurance did not know that it’s possible to sell an in-force policy through a life settlement.

Insureds over 55 usually have an easier time selling through policies than younger policyholders, but 63% of the survey participants over age 55 did not know what a life settlement is.

— Read 3 Ways to Cut the Value of a Life Settlement, on ThinkAdvisor.

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Allison Bell

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