1 week ago
Why HDFC Bank Faces Questions Over Life Settlement Funds
Life settlement funds buy life insurance policies from people who no longer want them.
The fund pays the insurance premiums and eventually receives money when the insured person dies.
That money is meant to become returns for the fund’s investors.
These investments can be difficult to sell quickly.
Returns can also be delayed if insured people live longer than expected.
An investor in Australia says a fund sold through HDFC Bank’s UAE operations stopped allowing withdrawals about a year after the investment.
The fund was connected to Carlisle Asset Management and was based in Luxembourg.
HDFC Bank says it only helped arrange the investment and did not manage the fund.
The bank also says it has not found evidence of mis-selling.
Life settlement funds buy existing life insurance policies and collect their death benefits after continuing premium payments.
Investors may receive potentially high, market-independent returns, but the products are often illiquid and dependent on when policyholders die.
An NRI investor in Australia alleged that a fund sold through HDFC Bank’s UAE operations halted redemptions about a year after investment.
The Luxembourg Life Fund, managed by Carlisle Asset Management, suspended redemptions in 2020 after increased redemption requests, according to cited reports.
HDFC Bank says it only facilitated the investments, denies finding mis-selling, and says fund performance and redemptions were the fund house’s responsibility.
- Who
- An NRI investor from Australia, other investors, HDFC Bank, Carlisle Asset Management, and the Luxembourg Life Fund are central to the report.
- What
- Investors are questioning the suspension of redemptions from a life settlement fund sold through HDFC Bank’s UAE operations.
- Where
- The investment was sold through HDFC Bank’s UAE operations, while the fund was registered in Luxembourg.
- When
- Redemptions were suspended in 2020 after increased redemption requests; Carlisle was acquired by Abacus Life Inc. in 2024, and a cited report was published in 2025.
- Why
- The fund halted redemptions, leaving investors unable to withdraw their money as expected and raising questions about the bank’s role and possible mis-selling.
Investor concerns
HDFC Bank’s response
Responsibility for the investment
Investor concerns
Investors questioned HDFC Bank after a life settlement fund sold through its UAE operations stopped redemptions and produced an unsatisfactory outcome.
HDFC Bank’s response
HDFC Bank says it only facilitated the investments and that responsibility for fund performance and redemptions rested with the fund house.
Possible mis-selling
Investor concerns
The redemption suspension has raised concerns among investors about whether the product’s risks were adequately explained.
HDFC Bank’s response
HDFC Bank says it has not found any incidence of mis-selling and that the fund was registered in a recognised jurisdiction with a track record of performance and honoured redemptions when investments were made.
Handling of the problem
Investor concerns
Investors remain dissatisfied because redemptions have not produced the expected outcome, according to the report.
HDFC Bank’s response
HDFC Bank says it has repeatedly liaised with Carlisle, external legal counsel, and Luxembourg’s financial regulator regarding the matter.
Key facts
- Investment product
- Life settlement funds buy existing life insurance policies, pay their premiums, and collect death benefits.
- Main risk
- Investors may have to wait for death benefits and may not be able to redeem their investments quickly.
- Fund involved
- Luxembourg Life Fund — Long Term Growth Fund
- Fund manager
- Carlisle Asset Management
- Redemption suspension
- Redemptions were suspended in 2020 after an increased volume of redemption requests.
- Reported performance
- The fund reportedly reported average returns of 20% and annual returns of up to 31% for nearly a decade until 2020.
- Reported investor amount
- The investors discussed in the report reportedly account for about $12.5 million; claims that total fundraising was about $100 million were unverified.
Sources
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