MPL survey shows overwhelming majority of institutional investors and IFAs looking for alternatives to traditional asset classes
Managing Partners NewsMarch 23rd, 2009
LONDON, 26.03.2009 – A survey of institutions and IFAs who invest in traded life policies conducted by Managing Partners Limited, the boutique fund manager, point to an overwhelming majority of them is looking for alternative investments to the traditional asset classes of equities, bonds, cash and property.
The survey revealed 92% of respondents are looking for investment alternatives, with only 8% saying they were not doing so. This included 93% of the IFAs and 90% of the institutional investors questioned in the survey.
TLPs are US-issued whole of life policies sold before their maturity date to allow the original owners to enjoy some of the benefits during their own lifetimes. They are gaining increasing recognition for their ability to deliver steady, predictable returns uncorrelated with other asset classes.
Such returns make TLPs an ideal substitute for with profits. The survey found that three out of five (60%) respondents thought TLPs to be a substitute for with profits, with 20% totally agreeing with that view and 40% agreeing to some extent. Three out of five IFAs and seven out of 10 institutional investors questioned agreed that funds that invest in TLPs are a substitute for with-profits.
There was strong support for TLPs to be regarded as an asset class in their own right, with 88% of the overall sample agreeing. This included 87% of the IFAs and 90% of the institutional investors questioned.
Jeremy Leach, Managing Director of MPL commented: “There is widespread disillusionment among both retail and institutional investors with the main asset classes. Diversification between them was supposed to protect investors against downsides but that has proved to be a false security over the last two years.
“On the other hand, our Traded Policies Fund, which is open to retail and institutional investors, provided double digit returns in 2008, which demonstrated TLPs are an uncorrelated asset class in their own right. Furthermore, they are an ideal replacement for with profits, which are failing to deliver the steady, predictable returns that they once did.”