An investment fund which aims to profit from the returns available from senior life settlements has listed on the London Stock Exchange today (20 December).
The Alpha Growth fund is run by Gobhind Sahney.
A life settlement is the sale of an insurance policy to a third party for more than its cash surrender value, but less than its net death benefit.
The fund aims to achieve returns that are not correlated to those available from bonds and equities.
The company believe the senior life settlement market is fragmented, with opportunities likely to arise to consolidate.
A revival of funds launched with the aim of investing in life settlement products may remind investors of the Financial Services Authority (FSA), the predecessor of the Financial Conduct Authority (FCA) warning about such products in 2011.
In November 2011 the FSA's then head of enforcement Margaret Cole branded life settlements funds "toxic" and unsuitable for retail investors.
That warning came in light of the collapse of Keydata, which invested in such products, in 2009.
So-called 'death bonds' sold by Guernsey-based EEA Life Settlements, which invested in second-hand insurance policies from elderly Americans, was also badly affected by the then-regulators comments that this type of product may not be suitable for retail investors.
Investors with cash trapped in the EEA fund subsequently took action in a bid to recover the losses.
david.thorpe@ft.com
