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Retail-funded providers to take over lifetime lead

Retail-deposit-funded equity-release providers could start to take charge of the lifetime mortgage sector next year.

Retirement Plus managing director Duncan Young says the credit crunch has led to annuity-funded providers looking elsewhere for investments.

He says: “Annuity-funded lifetimes did well in 2008 but I have my doubts about their dominance in 2009.

“Funding an annuity book means investing in various assets, including lifetime mortgages, but because of the credit crunch, things like corporate bonds are looking more app- etising so lifetime providers funded by annuities might lose their edge in 2009.”

Key Retirement Solutions business development manager Dean Mirfin says: “Annuity funds look at the risk of their investments and they have to be sure that it all stacks up.

“The big pressure for them in 2009 is what happens to property prices. If they continue to fall, they obviously affect lifetime mortgages and the risk of investing in them.

“Providers funded by retail investment do not have that pressure so they could become more aggressive in the sector. Of course, they have other pressures to consider so only time will tell.”


Heart of darkness

New Star’s problems intensified last week when Jamie Allsopp’s Heart of Africa fund was temporarily suspended from trading.

Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.


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