Case Study Details

CHALLENGE:

A large investment management firm with approximately $17B in AUM had a 50-year-old CIO who was vital to its ongoing success as he managed the most successful fund within their portfolio. The quoted premium for a $40M GUL policy was $423,232 per year and the firm was interested in pursuing a leverage strategy as a funding alternative.

SOLUTION:

Our team recommended a corporate split dollar structure that would serve two purposes. First, provide a death benefit to the firm if the Key Man were to pass away prematurely. Second, the structure could also allow the cash value of the policy to serve as an executive benefit for the Key Man upon his retirement. The policy was funded via a premium financing structure providing significant benefits to the firm and the key employee.

RESULTS:

The firm was able retain $6,348,480 that it would have otherwise spent had they chosen to fund the policy outright over the next 15 years while providing a dual benefit for themselves and the key employee. Additionally, after identifying other key employees, the firm elected to implement the same strategy for several key employees and managing partners.

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