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I took the liberty of commenting on an Alphaville post Death bonds’ unique risks . My comment is as follows: Life Settlements are clearly one of the asset classes you need to be extra-cautious investing into, but I have to disagree with the overall tone of this post, which appears to label ALL life settlement investments as money-losing and/or fraudulent products. Among the many life settlement investment managers I had a chance to speak with, there is a handful of people who seem to know what they are doing, having both the right industry experience and a (audited!) track record to back it up. The bottom line is, never invest into something you don't understand. Do your due diligence (especially if that is you fiduciary responsibility!). Pay attention to the valuation policy (no straight-line appreciation to life expectancy), type of policies (avoid those in their contestable period, be wary of the jumbo policies as they tend not to adhere to VBT), and check if the appropri...

Mercer put together a great report on Life Settlements, dated April this year, and I had the opportunity to obtain the original report that goes for 90 pages of Power Point slides. Very detailed, to the point and unbiased, it makes an excellent background reading. The report is not publicly available, but an 8 page summary can be found here . Another source of information I have recently acquired is the Life Markets: Trading Mortality and Longevity Risk with Life Settlements and Linked Securities . This is a collection of articles by market practitioners, and therefore has some natural bias in it, but it is well-structured and contains wealth of information. So much to read, so little time... ■

One of the great things about working in third-party marketing is that you get to meet all kind of investment managers from around the world. Over the past few months I have participated in the research effort on a very exotic asset class: life settlements. We met with a number of leading managers in the space, and had some very interesting discussions. Now I am clearly not an expert on the subject, but I believe some facts and thoughts below will still be interesting to share.