Life Settlements Offer New Way For Businesses To Raise Hard to Find Capital
Boutique firm sees significant spike in various industries considering
life settlement as a way to lower risk and raise funds in a recession. Experience with life settlements key to ensuring investors get what they pay for.
San Diego, CA (PRWEB) May 15, 2009 -- Mickelson Capital Consulting (MCC), a registered investment advisory company and creator of alternative investments, announced today that the credit crisis is shedding new light on life settlements as a way for businesses to raise hard to find capital. The boutique firm says since the credit crisis began, it has received an ever-increasing number of inquiries across a variety of industries including energy, hedge funds and commercial real estate development, all which are looking into life settlement portfolios as a collateralization strategy to assist in raising money during the downturn.
Industry Background: Life Settlement's Beginnings
About a decade ago, the life settlement (LS) industry was established, and since then, life settlement brokers have catered mainly to high net worth retirees looking to convert their life insurance policies from an illiquid asset into cash. Brokers help seniors negotiate and sell their policies to an increasing array of institutional investors like Credit Suisse, Merrill Lynch and many others who are looking to acquire substantial portfolios of these policies because they are a strong investment and way to diversify their holdings.
Since the market's inception, MCC, an authorized life settlement company, has advised clients about life insurance and life insurance settlements. To date, the company has seen clients through more than $500M in successful life settlement transactions.
"We continue to work with individuals to assist them in life settlements. However, over the last few months alone, we've heard from a number of investors and businesses that want to know how life settlements can be used as collateral," said MCC President, David Mickelson.
Emerging Trend: Businesses Leveraging Life Settlements
Life settlement portfolios (when well designed and managed) are an investment grade asset class with high rates of return, and importantly, are not correlated to other markets. For this reason, businesses are looking to leverage the asset class as collateral to guarantee investment capital and in hybrid investment funds/vehicles.
"Since the downturn began, companies have been looking to leverage life settlements for a variety of investment objectives including raising capital, smoothing cash flows, enhancing credit and other strategies," Mickelson added.
While Mickelson says that he is slightly surprised by the volume of inquiries his firm has recently received, he is careful to note that life settlement is not as unusual a strategy to raise capital as many would think. According to him, it's more an issue of education in that many businesses and individuals are unaware of the opportunity.
"Our extensive experience with the complexity of life insurance and life settlement transactions makes Mickelson Capital an ideal partner for investors to safely evaluate and participate in this alternative asset class," added Mickelson.
Life Settlement Collateralization Strategy Explained
Investors allocate a percentage of their investment funds for the purchase of a life insurance settlement portfolio. This portfolio can effectively guarantee the return of principle. The remainder is used for the primary investment strategy.
Life settlements offer a definitive payout backed by the credit of A-rated (or better) life insurance companies, so they are low risk, and very attractive collateral. Companies can purchase enough life settlements as a secure asset to give investors/creditors the confidence to make capital available. Based on an investor's objectives, Mickelson can help them:
1.) Develop an appropriate life settlement portfolio model
2.) Aggregate and acquire life settlements for the portfolio
3.) Service the portfolio to ensure investment goals are met
"It's a natural leap for businesses to make if they are aware of the opportunity," said Mickelson. "However, this is a complex investment strategy and we are uniquely positioned in terms of our expertise and sophisticated processes to help investors seeking to leverage this asset class. Our experienced team is available to answer questions and/or advise investors as needed."
About Mickelson Capital Consulting
Mickelson Capital Consulting (MCC) is a registered investment advisory company and creator of alternative asset class investments in the areas of life settlements and PIPEs (Private Investment in Pubic Equity). The firm provides customized investment solutions that are designed to build and protect the wealth of its clients and registered investment advisor (RIA) partners. MCC's reputation is grounded in its commitment to providing high-quality, "hands-on" customer service. MCC also has established relationships with an extensive network of RIA's, investment bankers, fund managers, lawyers and CPA's. For more information:
Life Settlement: 1-800-700-4450 www.mickelsonlife.com
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