When Michael Douglas’ iconic character Gordon Gekko walked the beach at The Hamptons talking to young Bud Fox (Charlie Sheen) on a Motorola wireless telephone, state-of-the-art technology circa 1987 was on full display. In that day and time, the “Brick” as it’s now called, was the best. Yet, as good as the technology was back then it continues to evolve into something greater. The same can be said about the Senior Life Settlement market and how Capstone Alternative Strategies saw an opportunity to make something great even better. When it came to designing The Capstone Platform, our primary focus was to make the Senior Life Settlement asset class even better for investors and Registered Investment Advisors (RIAs). It was with that mission in mind that also led us to create the Capstone Premium Reserve Management Solution or PRM. Capstone’s PRM addresses the primary variable in Senior Life Settlement investing, time to maturity, which in the case of extended longevity of an insured can cause an erosive effect on an investor’s Total Projected Yield to Maturity (YTM).
Capstone’s PRM is an institutionally managed extended longevity risk mitigation strategy that helps to assure that an investor achieves the YTM without premium calls. The PRM transfers Extended Longevity Risk from the investor to Capstone Capital Management to create a known outcome in terms of an investor’s TPY. More simply stated, Capstone shares Extended Longevity Risk with the investor.
Jason Bokina, our Director of Marketing, calls the PRM one of Capstone's most significant strengths. He said, “The Capstone team has reverse-engineered the life expectancy projection process. Capstone’s Premium Reserve Management Solution has been thoughtfully designed to properly allocate the necessary premium reserves to support the ongoing administration of a portfolio of Senior Life Settlement contracts to full maturation. The PRM virtually eliminates the risk of premium calls for investors which means a higher and more predictable return on investment.”
Capstone has gone to extensive lengths to ensure best practices in building the PRM. Through a strategic relationship with a large international asset management firm, each advisor’s segregated portfolio has a specific asset allocation of the premium reserves, institutionally designed to maximize Capstone’s premium paying ability to disintermediate the risk of extended longevity for the investor.
Michael Bradburn, who has written several white papers on Senior Life Settlements, calls the PRM a game changer. He said, “The PRM Solution is designed to make a Senior Life Settlement uniquely have a known-cost, a known-yield and a quantifiable value receivable in the future. Given the fact that this asset class has these characteristics and is unaffected by risks typically associated with capital market based products, it has tremendous value as an overall investment risk hedging strategy.”
To learn more about Capstone’s next generation platform for offering Senior Life Settlements to your clients, download our proprietary Premium Reserve Management (PRM) White Paper. For more information, please contact Jason Bokina at (404) 504-7006 or email us at contact@capaltstrategies.com.