A new market entrant is launching a traded lives investment fund which is aiming for a 12 per cent return by investing in American life insurance policies.
The Fortress Group International fund is an alternative investment opportunity which buys life insurance policies from US citizens with short life expectancies.
Fortress says the collective investment fund offers investors the chance of doubledigit returns regardless of the performance of equity markets in an asset class which is already established in the US.
Aimed at high-net-worth individuals, minimum investment is £56,000. Annual management charge is 1.5 per cent. Commission is 4 per cent initial and 0.5 per cent trail.
The fund trades in the life policies of people with a life expectancy of between four and seven years, with an average age of 78.
Already accepted as an option through the offshore operations of Hansard and AIG, Fortress is hoping the British Virgin Islands-registered fund will take in over £100m in its first year.
Fortress director Kevin Neal says: “This investment vehicle is based in a heavily regulated jurisdiction and is completely unaffected by world markets and is completely transparent in the way that we pick policies.”
Dennehy Weller managing director Brian Dennehy says: “We always want to see some performance before going into a new fund. These things can work in the US but I would want to see how they run it over here before putting clients' money into it.”