The senior life settlement market has, just as any other market, had it’s ups and downs over the last several years. Because of extreme conditions within the credit markets and inability for many life settlement providers to access new credit, the life settlement market was difficult to navigate.
At the same time providers were unable to readily access new credit, they were also holding larger than normal amounts of cash in order to service existing debts and obligations. Very small amounts of capital were available for new purchases of senior life settlement blocks.
Over the last several quarters, we have seen an easing in the credit markets, giving providers access to new capital. Even more so than access to new capital, reassurance that economic conditions are not worsening has allowed providers to reallocate existing cash towards the purchase of new policies.
Recently, several sovereign wealth funds have begun to enter the marketplace in a number of ways. This type of new investment is a strong indicator that the senior life settlement market has weathered a difficult storm and remains to be a strong asset class moving forward.
One of the main reasons the life settlement market is becoming attractive once again, is the noncorrelation with equity and debt markets. The ability for mortality risk to provide bond like returns without the swings in the market has allowed the senior life settlement market to attract new investment.
For more information regarding the life settlement market, please visit LIVEpdq.