Tremont Plans To Sell New Hedge Funds Via Life Insurance Despite Clampdown

by Philip Morton, Investors Offshore.com

19 September 2003

Tremont Partners has announced that it intends to take advantage of a planned Treasury crackdown on the use of life insurance investments as tax sheltering arrangements to launch three new hedge fund offerings.

Although the Treasury and Internal Revenue Service recently unveiled proposals designed to limit the use of life insurance 'wrappers' to defer taxes on hedge fund investment, this crackdown will, paradoxically, endorse the use of hedge funds as investment options for insurance policies under certain conditions.

Speaking recently, Sandra Manzke, co-chief executive of Tremont Capital Management explained that: 'The IRS opinion validated the way we have approached the insurance industry.'

In a statement, Tremont explained that it will be permitted by the Treasury Department to sell its offerings via insurance products because they are only available to insurance providers.

According to Ms Manzke, the first three products to become available will be multi manager funds employing three specific strategies, namely long/short equity, convertible arbitrage, and event driven. Global macro and fixed income arbitrage funds are planned to launch over the next few months.

'Investors in insurance products need diversity in their investment choices,' she explained, continuing: '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.'

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