Carlisle Management Company
Life Insurance as an Investable Asset
Targeted High-Return and Uncorrelated Alternative Investment
For important risk and disclaimer information, Click here.
Tamara Williams | Managing Director | |
(385) 600-1871 |
Donald Jordan | Managing Director | |
(248) 761-0862 |
Overview
Carlisle Management Company SCA (“Carlisle” or the “Company”) is a Luxembourg-based regulated alternative investment platform focused on the US life settlements market – purchasing secondary / tertiary life insurance policies as an investable asset
The Company has announced a definitive agreement to be acquired by Abacus Life (NASDAQ: ABL), a US publicly-traded alternative asset manager that is expected to result in the group becoming the largest origination company and asset manager in the life settlements industry
Carlisle is seeking $150-$250 million to grow the platform
Company Track Record
Carlisle is the largest alternative asset manager focused solely on life settlements with a 15-year+ track record
- Established in 2008
- Supervised by the Luxembourg financial regulator CSSF
- Management company and funds audited by KPMG
Active Policies as of Date
- ~$2 billion AUM (~$4.3 billion face value)
- 1,609
Policies Matured/Sold as of Date
- ~$2.3 billion
- 2,406
Historic Returns
- 1.69 x MOIC
- 13-15% Net IRR (Gross IRR 19-23%) Average Annualized Return
Target Gross Return at Entry
- 22.0% (discount rate applied to the future cash flows that will determine the acquisition price of the policies)
Abacus/Carlisle – Combination Rationale
The combination is set to create the largest life settlements origination company and asset manager globally
Positioned at the forefront of the industry and product innovation – The combined entity will become the largest origination company and asset manager in the life settlements industry, leading the way for innovation
Global coverage spanning US, Europe, Middle-East and Asia – Have a global reach and a framework to service clients and investors across geographies, brining life settlement solutions and investments to the global investor market
Leverage new business opportunities – Incorporate new business solutions, products, and services to existing and new clients, as well as new innovative products that the company will be developing
Deliver state-of-the art services and support to investors – Enhance the existing services to investors and provide unparalleled support to Carlisle operations incorporating innovative offerings from ABL Tech
Abacus/Carlisle – Synergy Opportunity
Compelling synergy opportunity that should bolster outcomes for its investors
- Global, leading institutional shareholders allow access to a broader pool of capital, resulting in increased financial flexibility and lower cost of capital
- Combined investment management acumen
- Improved contingency and succession planning strategy to ensure business model sustainability
- Access to unprecedented origination sources and top-quality streamlined servicing across the entire value chain
- Enhanced asset monetization opportunities
- Cost optimization potential due to economies of scale
Key Investment Highlights
The combined entity’s long-standing and proven track record has established it as a respected leader in the highly-regulated US life settlements market
Vertically-integrated alternative asset manager, originator and market maker – The combined Abacus / Carlisle entity is expected to be the largest origination company and asset manager in the life settlements industry. The vertical integration allows the group to control the channel, to have a steady supply of assets, and to benefit from information asymmetry – key differentiators not available in the tertiary market
Large underpenetrated market opportunity and social benefits – Life insurance is a $13tn market, with $233bn of policies lapsing every year. Only $4bn of policies get settled before lapsing, due to low consumer awareness. Life settlement provides senior individuals access to the value of an otherwise illiquid asset
Attractive uncorrelated yields – Target 15% net IRR* with highly predictable cash flows and low volatility of returns, effectively acting as a mortality-driven zero-coupon bond. The primary investment risk of this asset is longevity, which is uncorrelated with the broader capital markets
Investment grade counterparty risk with significant downside protection – The underlying payment claims are born by mostly investment grade-rated insurance carriers. Policies are super senior obligations and are cash collateralized at the carrier level
Limited competition and high barriers to entry – Carlisle holds an Alternative Investment Fund Manager (“AIFM”) license in Luxembourg and is regulated by CSSF. Abacus is the largest originator (in terms of settlement value) with ~25% market share and is licensed and regulated by the department of insurance in each of the 49 states it operates. As a publicly-traded company, Abacus is also regulated by the SEC
Life Settlements vs. Other Asset Classes
Life settlements – unlike other alternative assets – are largely immune to credit risk, interest rate risk, and broader market risk, while generating reliable ongoing cash flows
Management Team
Jose C. Garcia | CEO
- 20 years in life settlements
- Co-founded Carlisle Management Company
- Successful track record across life settlements and capital markets, as well as fund management, and investment structuring
- Led and overseen the purchase of over $15bn of face value of life settlements
- Previously, CEO and Equity Partner of Portsmouth Financial Group
Tim Mol | COO
- 14 years in life settlements
- Co-founded Carlisle Management Company
- Experience includes investment fund management and administration, including a number of life settlement vehicles
- Previously, Director of Operations at Equity Trust Group
Ward H. Kerr | Lead Acquisition Consultant
- 25 years in life settlements
- Extensive relationships with executives, brokerage firms, insurance agencies, and regulators in the insurance, wealth management and brokerage industries
- Originated over $5bn of face value of life settlements
- Previously, Co-founded Life Equity in 1999, as Chief Marketing Officer
Victor Heggelman | CFO
- 13 years in life settlements
- Joined Carlisle in 2009, appointed CFO in 2011
- Experience includes audit and advisory services to numerous life settlement investment vehicles regarding accounting policies and valuation
- Previously held roles at Morgan Stanley and KPMG
Christopher Winters | Head of Portfolio Management
- 16 years in life settlements
- Extensive experience in life settlements, working in a variety of capacities, including the development and launch of new investment vehicles, management of large portfolios, and the executive management of a life settlement operations
- Previously, Chief Operating Officer of Portsmouth Financial Group
Specific Risks
- Operational Risk: In the normal course of business, the investments may be exposed to a variety of operational risks, including position pricing and Net Asset Value calculation procedures, client reporting procedures, compliance controls, and policy acquisition sources
- Liquidity Risk: The platform may not be able to settle or meet its obligations on time
- Credit Risks: Insurance companies issuing the life insurance policies may be unable or unwilling to meet the death benefit payments of the insured lives as they fall due
- Mortality Extension/Longevity Risk: Risk of insured living longer than expected – actual versus expected
- Private securities are speculative, illiquid, and carry a high degree of risk – including the loss of the entire investment