Life Settlement Assets Plc · LSE:LSAA
Life Settlement Assets — Investor Presentation (September 2020)
25 slides from Life Settlement Assets's investor presentation, September 2020
Slide 1: Corporate Presentation
Corporate Presentation Sep 2020 June July 2019 2018
Slide 2: Disclaimer
Disclaimer This document and the information contained herein have been prepared solely for the purpose of providing general information about Life Settlement Assets PLC (the "Company") and its operations. This document is not to be used for any other purpose and in particular does not purport to pr
Slide 3: An Introduction to LSA
An Introduction to LSA Our History Listed on the Specialist Fund Segment of the London Stock Exchange, LSA supports and and manages portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the United States. The business was
Slide 4: Why Us?
Why Us? 3
Slide 5: Our Track Record
* Our Track Record 10 years of delivering strong returns to our clients • Highly experienced and prudent management team from the insurance, life settlements, actuarial and accounting sectors • Acheron utilises market data together with sophisticated actuarial software and analysis to deliver long t
Slide 6: Our Investment Policy
Our Investment Policy Our investment objective is to generate long-term returns for investors by investing in the life settlement market. We seek to achieve this through each of our separate Share Classes: Share Class B Acquisitions Share Class A • Invested in life insurance • Consider future • Inve
Slide 7: Board of Directors
Board of Directors Michael Baines, Chairman Christopher Casey, Audit Committee Chairman Michael Baines is a graduate of the University of Oxford and The Royal Christopher Casey has extensive experience as a non-executive director Military Academy Sandhurst and has previously held high-level position
Slide 8: Our Structure
Our Structure * *Lorenzo Tonti 2006 Trust, Avernus Portfolio Trust and Styx Portfolio Trust are currently being consolidated to Acheron Portfolio Trust 7
Slide 9: Our Investment Manager
Our Investment Manager Acheron is responsible for devising and modelling the investment strategy of the Company’s trusts. Founded in 2005 by Dr. Jean-Michel Paul, Acheron is a London based independent investment manager authorised and regulated by the FCA, that focuses on niche investment strategies
Slide 10: Performance Fees
Performance Fees Performance fees for Class A and B • 25 per cent of the sum of the net distributions made to the holders of • Additionally, an amount equal to the Accrued Performance the Ordinary Shares in excess of the Performance hurdle (assessed Fee in respect of the Acheron Portfolio Trust and
Slide 11: About Life Settlements
About Life Settlements • A policy has positive net expected value to an investor if the expected discounted premiums to be paid and the purchase price of the policy is less than the value expected discount of the death benefit Life settlement profit An illustration of how profit is Cashflows $ gener
Slide 12: About Life Settlements: An evolving market
About Life Settlements An evolving market • Low correlation • Low correlation with traditional equity and fixed income markets, extending the efficient frontier • Returns from life settlements are mostly dependent upon mortality experience, which have remained stable in recent times • Low volatility
Slide 13: Share Class A Investment Case
Share Class A Investment Case Class ‘A’ invests in life insurance policies acquired from special or distressed situations, giving mixed exposure to HIV (average age early 60s) and the elderly (average age mid to late 80s). Class A has exposure to fractional policies • Meaningful number of maturities
Slide 14: Share Class A Maturities and NAV Return
Share Class A Maturities US$ * Share Class A NAV Return 2013 18,235,399 115 2014 23,940,072 110 2015 19,310,101 NAV Return rebased to 100 2016 18,316,544 105 2017 32,849,813 100 2018 20,825,540 2019 41,728,100 95 LSA - A Shares 2020.06 8,854,308** 90 Total 184,059,877 Mar-18 Jun-18 Sep-18 Dec-18 Mar
Slide 15: Share Class B Investment Case
Share Class B Investment Case Class ‘B’ invests in life insurance policies exposed to the elderly (average age mid to late 80s). Class B has exposure to fractional policies • Actuarial model forecasts material cash flow generation in the coming years due to the existing large policies • Expected opp
Slide 16: Share Class B Maturities and NAV Return
Share Class B Maturities US$ * Share Class B NAV Return 2013 3,783,849 140.00 2014 6,639,170 2015 2,010,520 120.00 2016 6,744,087 NAV Return rebased to 100 2017 7,305,068 100.00 2018 5,242,275 2019 3,409,601 80.00 LSA - Share B 2020.06 1,448,248 60.00 Total 36,582,818 Mar-18 Jun-18 Sep-18 Dec-18 Mar
Slide 17: Maturities
Maturities Class A Maturities 45 Millions 2013 18,235,399 40 2014 23,940,072 35 2015 19,310,101 2016 18,316,544 30 2017 32,849,813 25 2018 20,825,540 20 2019 41,728,100 15 2020.06 8,854,308* 10 Total 184,059,877 5 Average 24,114,273 0 * This figure does not include class D and E 2013 2014 2015 2016
Slide 18: Financial Results
Financial Results * Unaudited Results for the period ended 31 May 2020 Final Results for the year ended 31 December 2019 Total maturities of US$ 11.3 million (HY2019: US$ 33.9 million) Total maturities of US$ 58.8 million (FY2018: US$ 32.7 million) as a result of higher maturities across all sha
Slide 19: Risk and risk management
Risk and risk management • Mortality risk: Changes in mortality rates may adversely affect the performance of the policies held by the Company in respect of a Share Class. • Premium management risk: Unanticipated volatility in mortality rates makes liquidity management of premium reserves difficult,
Slide 20: Risk and risk management
Risk and risk management • Discount rate risk: The discount rate used for reporting or valuation purposes may be on a portfolio basis or on a bottom up policy by policy or policy type by policy type basis, which can create material value differences. Further, there is no well-established market disc
Slide 21: Conclusion
Conclusion A unique, seasoned portfolio with leading Actual to Expected performance delivering long-term positive cash flow • Focused on maximising performance and distributing realised profit derived from its life settlement portfolio to its shareholders • Robust valuation model which has delivered
Slide 22: Appendix
Appendix 22
Slide 23: Glossary
Glossary Actual to Expected Ratio Actual death (either face amount or number of lives) in a group of lives being evaluated, over a specified period divided by the expected deaths over the same period. Actuary Actuaries measure and manage risk. Actuaries are knowledgeable in mathematics, statistics a
Slide 24: Glossary
Glossary Insured The individual(s) upon whose life is insured under a life insurance policy's contract. Upon the death of such individual(s), the net death benefit would be paid to the beneficiary. Life expectancy Life expectancy is an average number of years (or months) that a person is expected to
Slide 25: Glossary
Glossary Life Settlement A life settlement is the sale of a life insurance policy to a third party for a value in excess of the policy’s cash surrender value, but less than its face value, or death benefit. A policy owner receives a cash payment, while the investor acquiring the life insurance polic
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