Managing Partners, the fund management firm which specialises in life settlement insurance policies, has partnered with MIDF Amanah Asset Management Berhad to tap the Malaysia market.

MDIF, a Malaysian firm, operates in a number of financial market sectors, with core businesses of investment banking, development finance and asset management.

MPL invests in US life settlement policies; these policies are sold by their beneficial owners before maturity to unlock their cash value, often in cases where a terminally ill person requires the money. These policies are bought at a discount and held in a portfolio in the expectation of achieving a steady return, based on actual calculations of age and death rates. MPL’s Traded Policy Fund was launched in 2004 ahnd has achieved returns of 8 to 10 per cent a year.

The market in what is sometimes called "longevity risk" has expanded in recent years, driven both by a need by firms and pension funds to hedge the risk of people outliving their retirement funds, and by investor hunger for stable, inflation-busting returns. (To view a recent article on the subject, click here.)

MPL has also now created a Ringgit share class for the Malaysian market as part of its agreement with MDIF.

Traded life settlements are beneficial to investors because, their advocates say, returns are lowly correlated to other asset classes, such as equities.  

The Traded Policies Fund offers institutional share classes in Japanese yen, dollar, euro and sterling denominations. Growth share classes, which are suitable for retail investors, are available in yen, dollar, euro, sterling, Swiss franc and Swedish krona. The fund is fully hedged in these currencies. The longest-running share class in the fund, the dollar Institutional, was launched on 30 June 2004 and has returned 83.98 per cent net of charges over the seven years from its launch to 1 August 2011.