RT Journal Article SR Electronic T1 Private Placement Life Insurance JF The Journal of Wealth Management FD Institutional Investor Journals SP 27 OP 33 DO 10.3905/jwm.2002.320452 VO 5 IS 3 A1 Brad F. Cole A1 Christine M. Kailus YR 2002 UL https://pm-research.com/content/5/3/27.abstract AB The article starts with the observation that, as equity market returns have eroded over the last couple years, interest in hedge funds and other liquid alternative investment strategies has increased dramatically. While these funds satisfy investor demand for market diversification (through the use of hedging, leveraging, or other strategies), many employ trading strategies that can wreak havoc on after-tax returns to investors. As hedge funds gained popularity, many traditional financial services firms have embraced their potential and have attempted to incorporate them into their product offerings. Insurance firms have led the way by merging the tax efficiency of insurance products with the diversification benefits of hedge funds, which bred an insurance vehicle called private placement life insurance (PPLI). The authors suggest that customized PPLI products were initially arranged offshore using small insurance carriers that were willing to put policy assets into a hedge fund. More recently, large domestic insurance carriers have begun to offer the product as well. The article, which illustrates a simple bridge between hedge fund and insurance language and products, begins by explaining how private placement life insurance developed from traditional life insurance products. It describes the regulation of these products, attempts to address regulatory concerns and risks for the insurance company, fund manager, and investor, and considers some of the latest product offerings as a suggestion of where this market may be going.