RYE, N.Y. (HedgeWorld.com)–Tremont Partners* launched a new platform of single-manager vehicles and funds of funds for exclusive use by insurance companies in private placement life and annuity contracts and corporate-owned life insurance.
Called LifeInvest, the platform initially will offer three strategy-specific funds of funds specializing in long/short equity, convertible arbitrage and event-driven. Tremont expects to add global macro and fixed-income arbitrage over the next several months.
LifeInvest also will allow investment with some of the single managers who underlie the funds of funds. An event-driven fund and a statistical arbitrage fund will be the first available for this purpose. Tremont, a fund of funds operator, can add or replace managers as needed.
The launch comes after a recent Internal Revenue Service ruling confirming that private placement insurance products must use funds available only to insurance providers and not controlled by policyholders in order to qualify for insurance tax status .
“Our new LifeInvest platform is designed to help insurance companies meet the need for hedge funds in their private placement insurance products,” said Sandra Manzke, co-CEO of parent company Tremont Capital Management Inc., in a statement.
According to Ms. Manzke, another benefit of LifeInvest is that it offers investment choices designed to help achieve an array of risk and return objectives within various time horizons. In addition, the structure allows for smooth transitions to new managers in cases where a hedge fund might close.
“Investors in insurance products need diversity in their investment choices,” added Ms. Manzke. “And they need to know that there will be continuity with their investments in case a manager retires, closes a fund or returns assets. Our platform’s structure ensures that these needs are met.”
The program is an expansion of the firm’s insurance line. Separately, Tremont manages four other multi-manager funds for insurance companies, including proprietary vehicles. Those funds have assets of more than US$250 million and include the American Masters Insurance Series, currently distributed by eight U.S. insurance carriers .
Mass Mutual Insurance, the parent company of Tremont Capital’s owner, OppenheimerFunds, is the first insurer to market LifeInvest funds.
Tremont Capital Management advises on more than US$9 billion in alternative investments, including more than US$1.5 billion in assets in its proprietary products. OppenheimerFunds and its subsidiaries managed assets of more than US$130 billion as of June 30, 2003.
*Tremont Partners is owned by Tremont Capital Management Inc., which is a minority investor in and a strategic partner of HedgeWorld.