Jeremy Leach - Traded Life Policies Specialist - Traded Life Policies Expert - Life Settlements Specialist

Articles • 2010-2012

Press articles published in some of the most prestigious financial publications throughout the world.

Publication Date: 17/12/12
Cash-rich Asian Companies Will
Drive Equities Higher in 2013
Cash-rich Asian companies will be among those corporations with healthy balance sheets driving global stockmarkets higher through acquisitions in 2013, according to Managing Partners Limited, the boutique fund management company.

On an historical basis, M&A activity is extremely cheap to finance because interest rates are so low, says Jeremy Leach, managing Director of MPL. He commented: “In the 1990s the cost of debt was 10%-plus but it can be done for a fraction of that now, so it is cheaper to raise money with debt rather than raise equity. It is far better issuing some sort of convertible debt and allowing conversion when the share price has gone up.

“Leading Asian businesses are also likely to lead the way with acquisitions in Europe because they are so cash-rich and Europe is so cheap. We could quite easily see a situation where one of the leading bank brands in Europe is acquired by an Asian bank because it has the purse strings to do it.”

Key factors supporting takeover activity, especially from Asia firms, include:
  • In the first three months of 2012, National Oil Companies (NOCs) were involved as buyers in 25 oil and gas transactions with a combined value of US$12.4bn. The most active deal-makers in the first quarter of 2012 were NOCs from Asia and Russia. Recent years have witnessed the Asian NOCs’ international pursuit of production and reserves to meet aggressive supply targets. Most deals announced by Russian NOCs focused on the acquisition of stakes in independent domestic oil and gas companies or regional partnerships to help develop domestic oil and gas reserves

  • Global sourcing and distribution multinational Li & Fung Limited has said it will accelerate its acquisitions in 2013 on the back of continued strong profits. At a recent conference in Hong Kong, William Fung, Chairman of Li & Fung, stated “As the company’s organic growth is virtually zero due to the sluggish market demand in the European and US market, we have to make more acquisition in order to push up the core operating profit performance. Amid the current global economic slowdown, we can find more attractive acquisition targets by paying much cheaper prices. Those European and Asian region focused companies and those health & beauty product providers will be our main priorities for acquisitions.”

  • SABIC, the Saudi Basic Industries Corp., which acquired US' GE Plastics for $11.6bn five years ago, has indicated that it now has appetite to making further significant acquisitions in a bid to become the largest chemicals producer in the world. SABIC is fairly typical of large Middle Eastern companies that see the need to expand outside the Middle East because the continued impact of the Arab Spring has destabilised the growth of Arab markets and is likely to do so for some time to come

  • With the discounted value of many UK and European banks, many are prime for acquisitions by the Asian heavyweights and the timing would appear to be ideal as conservative lending margins (typically 4% above base) have never been more profitable for banks than they are today. Their only restriction is capitalisation, which many wealthy Asian banks could easily deliver to the ailing balance sheets of UK and European lenders

Mr Leach says a wall of cash is waiting to enter the equities market: “The longer the recession goes on for the longer the more dramatic the bounce will be. When it happens we will see a period of sustained recovery that produces better financial results, more trade of equities and more M&As.”

However, Mr Leach does believe Europe will continue to struggle: “Europe has a long journey ahead of it. Austerity can work in a country such as Spain, which has its own economy but Greece has a fabricated economy, with most people working for a government that has no money. It just isn’t feasible that Greece will ever be able to repay its debts.

“There is considerable debate now across Europe and not just in the UK about the amounts that have to be contributed to the EU. We are still likely to see at least one exit from the EU. It is inevitable that Greece will leave but we might also see a significant contributor to the budget depart, which will have long term consequences for the union.”

Mr Leach believes that while there will clearly be a number of corporate casualties resulting from Greece’s departure and some banks will see major corrections in their balance sheets, in general there will be more relief that the inevitable point has been reached.

Publication Date: 16/04/12
'We get compared with Brazil teak funds':
UCIS providers speak out
UCIS providers discuss how they market their products to IFAs and what they make of the FSA’s new strong-arm approach to those who recommend them…

Sharing tales of outlandish investment opportunities is fast becoming some advisers favourite pastime. One even keeps a folder storing his all-time favourite pitches, from green oil to self-storage. All, he said, guarantee returns and offer generous trail commissions.

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Publication: Hedgeweek
Publication Date: 28/12/11
Partial break up of Euro inevitable in 2012
A partial break up of the Euro is inevitable, with Greece the most likely to default and leave the single currency 2012, according to fund manager Managing Partners Limited (MPL). The Euro was always going to be tested in an economic downturn, for the same reasons the European Currency Unit was tested in the early 1990s, says Jeremy Leach, Managing Director of MPL…

How can the same fiscal policy decisions work for tier one countries such as Germany versus tier two countries such as Greece? The debts were always going to be too much for Greece to pay.

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Publication: Fund Strategy
Publication Date: 05/12/11
"TLP funds are complex investment vehicles"
The FSA’s warning last week that “high risk” traded life policy (TLP) investments should not reach retail investors was not only met with agreement by many advisers but also echoed by TLP providers themselves, eager to point out that the products are targeted at sophisticated investors.

According to the FSA, TLP investments, also called life settlements or ’death bonds’ are pooled investments that invest in American life insurance policies, with investors buying the right to the insurance payouts on the death of the original policyholders. TLPs are generally considered to have a low correlation to capital markets.

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Publication: International Adviser
Publication Date: 28/10/11
The rise of share classes denominated in local currencies
The ongoing shift in economic power from West to east is well known. Western governments are now relatively more indebted than those of Asia, which is reflected in credit rating downgrades, most notably that of the United States. There are many consequences to this but what we are seeing in the international investment market is a growing number of fund share classes being denominated in the currencies of what have been deemed as ‘emerging’ for some time.

The emerging markets of Asia are different from those of other regions. This is because countries in Latin America and the Middle East still largely peg their currencies to the US dollar. Furthermore, In the Middle East there is a different driver because investors there are very cautious about investing locally because of the state of the market, especially in the Emirates. There is a moral and cultural requirement to invest locally but they do wish to spread their investment overseas and are happy to do so in Western currencies.

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Publication: Fund Strategy
Publication Date: 03/10/11
The rise of traded life policies –
but IFAs and investors must appreciate the risks
Equity and bond markets are once again beset by fears of another financial crisis. Equities are volatile and have fallen significantly since the beginning of the year while several observers think another crash is due. Investors are looking hard for investments that are uncorrelated to the main asset classes. One such asset class is traded life policies (TLPs), which are also known as life settlements.

TLPS are US-issued whole of life policies sold before their maturity date so that the original owners can enjoy some of the benefits in their own lifetimes. Life expectancies do not depend on whether share or bond prices go up or down and as such, TLPs constitute an uncorrelated asset class.

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Publication: FEIFA
Publication Date: 21/01/11
Traded Policies as a New Asset Class
The financial crisis of 2007-08 severely shook many investors’ faith in diversification as a way of reducing risk. This was because the main asset classes – including equities, bonds, property and in some cases, even cash investments – all incurred losses.

Amid all the turmoil however there was one relatively new asset class that, in the right hands, still managed to deliver positive and steady returns. That asset class is traded life policies (TLPs), also known as life settlements.

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Publication: WealthBriefing
Publication Date: 19/10/10
What makes a good TLP fund?
Traded life policies (TLPs) attracted increasing attention during the financial crisis because they stood out as an asset class that could deliver positive returns even as equities and bonds were going south.

However, TLPs have attracted controversy, not least because as a relatively new form of investment they are still deeply misunderstood. So what should investors and wealth advisers know in order to differentiate the ‘good’ from the ‘bad’ funds that invest in TLPs?

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Publication: Investment Adviser
Publication Date: 27/05/10
Hedge currency to beat volatility
One of the major effects of the financial crisis of the last few years has been extreme volatility in the world’s foreign exchange markets.

Uncertainty has propelled currencies way outside of their long-term ranges and in recent months the lack of confidence has driven down the value of Sterling and the Euro as more bad news emerges about the state of several governments’ finances.

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Publication: Investment Adviser
Publication Date: 22/03/10
A response to the FSA’s view on TLPS
Traded life policies (TLPs) passed a significant milestone towards gaining greater recognition in the UK when FSA Head of Investments Policy Peter Smith made them the subject of his address to the European Life Settlements Association’s conference in February.

Mr Smith’s speech will not be remembered as a resounding endorsement of TLPs, or life settlements as they are also known. But the fact that the FSA is now talking about TLPs is a major step.

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