Friday, January 29, 2010

Goldman Details Reason For Leaving Life Settlement Business

Goldman Sachs, New York, confirmed that it was taking apart the second leg of a three-leg stool in the life settlement business and plans to exit the business entirely.

“We are getting out of the business for commercial reasons. When we bought the business [Longmore Capital, LLC] in 2006, we thought it [the life settlement market] would evolve into an institutional marketplace. But we believe it will remain a small market for some time to come,” says Michael DuVally, a Goldman spokesperson.

Longmore operations, based in Southborough, Mass., are currently being terminated, he continues. Goldman also will leave the third leg of its life settlement stool, Institutional Life Services, New York. ILS is a joint venture with National Financial Partners, New York, and Genworth Financial, Richmond, Va. DuVally declined to say what stake Goldman holds in ILS.

Last month Goldman announced that it had discontinue its Life Settlement Index (QxX) and turned it over to AVS Underwriting LLC, Kennisaw, Ga., a partner in the venture. Philip Loy, AVS founder and owner says that he will continue to operate the index although details of how it will continue are still being determined.

A spokesperson for NFP states that “Life insurance liquidity needs, in the form of life settlements, continue to be in high demand by consumers, although the current credit environment has partially limited these transactions from a capital perspective. That stated, Institutional Life Services, LLC (ILS) remains active settling policies on an ongoing basis with a diverse group of life settlement buyers and NFP and its firms continue to support ILS. Beyond that, as a matter of policy, we do not comment on the details of our investments, other than as required to be disclosed in our public filings.”

This article first appeared in Life Settlement Review.

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