Miami, FL - Investing for higher returns always involves more risk. But what if you could contractually insure most of that risk away? Thanks to the efforts of an innovative hedge fund manager, this is now a reality.
Next Level Holdings, LLC, has launched new absolute return hedge funds that carry the backing of dedicated insurance policies underwritten by top-rated carriers. In addition to insuring against loss of principal, these unique funds also include contractual assurance of whopping returns in the range of 24% per annum.
According to CEO and founder Paul Regan, "These funds represent a new paradigm in investing options. We've been able to marry a risk-controlled arbitrage strategy with an actual insurance policy issued to our investors. That way, investors can realize S&P 500, beating returns without the usual large downside risk that goes along with them."
These new hedge funds require a minimum investment of $100,000 USD. For that amount, the investor receives a secured promissory note and something entirely different; as a security instrument, a dedicated insurance policy or surety bond issued by a top rated insurance carrier which guarantees against loss of principal as well as a fixed rate coupon with their name listed as beneficiary.
"We had to practically move mountains to gain acceptance from our insurance partners," Regan says. "But after an extensive review process, these companies are now comfortable enough to underwrite the risk and issue policies on our note offerings as well as the family of funds being launched later this year."
The investment strategy is based on exploiting spot price differences for physical commodities that can show up across different markets. "That makes it already a low risk, which is the only reason the insurance companies were willing to consider this type of product," Regan states.
Since arbitrage opportunities are not necessarily predictable, the company has other strategies in place. In some cases, the arbitrage transaction consists of selling at spot price, then immediately delivering through an established network of prearranged agreements. Regan explains further: "Gold is the main commodity we actively trade. We have a network of small to mid-sized gold mining operations with which we've negotiated multi-year agreements. When we find an opportunity to sell gold at spot (market) price, we then have a standing agreement to immediately buy to fill from a local provider at a considerable discount to spot. Next Level and its investors realize the difference, and the local companies are more than happy to sell their product at that price, in exchange for guaranteed volume agreements." Next Level as a fully licensed entity then coordinates the export and shipping of the physical commodity to one of several international refineries within its vast network to complete the transaction.
Is it risk-free? "Of course, there is always some form of risk with any investment," Regan shares. "But in this case, with the help of our insurance partners, we've engineered much of the risk out."
The company realized that the insurance is only as valuable as the strength of the individual backer. So they sought out and successfully partnered with several top firms rated B++ or better by A.M. Best. These providers include Lloyds of London, Afiancol, RedBridge Insurance, and Ocean International Reinsurance. Often these promissory notes will carry several insurers participating in the securitization process through syndication partnerships making the note offering even more attractive from a risk perspective as they will have primary insurers as well as reinsurers standing behind the surety bonds and insurance policies issued directly to the investors.
The release of these innovative funds could not come at a better time. "With recent market events, many investors have shifted their focus to capital preservation," says Regan. "With our arbitrage-based strategies backed by an actual surety bond, this provides investors with a completely new option."
Next Level's investment strategies don't require being right about time, price, or market direction. The security of capital and the controlling of risk is not just a part of what we do at Next Level Holdings," Regan continues. "It's at the heart of all we do."
To date, Next Level has launched its absolute return income fund. Over the first few months of 2023, it will also launch growth and retirement funds.
About Next Level Holdings
Next Level Holdings, LLC, is a multinational holding company developing risk-managed investment strategies that help people invest safely in all market conditions. Its arbitrage-based approach focuses on physical commodities, including gold, lumber, timber, and coffee. Please visit https://www.nextlevelholdings.co/ for more information.
