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SHIELD Enhanced Portfolio Model

20-Year Financial Projection with 5-Year Strategic Exit

Patent Pending: USPTO #63/807,771
Target 14.6% IRR (after fund management fees) through diversified life settlement and housing equity strategy
20-Year Model Detail 5-Year Stress Test Technical Library How It Works

Portfolio Structure

Target IRR
14.6%
After fund management fees
Total Fund Size
$175M
Initial investment
Strategic Exit
Year 5
Planned for all participants
Life Policies
100
$500M face value
Enhanced Strategy: Combines traditional life settlement returns with 15% equity ownership in affordable housing developments. 5-year strategic exit provides $162.6M return (principal + equity exit) as integral part of return structure for all participants.

Fund Allocation

Life Settlements
$125M
25% of face value
ARNEX Strategy
$50M
6% target return
Housing Principal
$150M
Borrowed at par
Equity Position
15%
Property ownership

Return Components

Multiple Income Streams

  • Life Settlement Benefits: $500M face value over 20-year period
  • Housing Interest: 4.5% on $150M borrowed principal
  • ARNEX Returns: 6% annual target on $50M allocation
  • PHA Payments: $5.3M annually from housing operations
  • 45L Tax Credits: $1.2M annually during development
  • 15% Equity Exit: $12.6M target in Year 5
Year 1 Stress Test
0%
Zero mortality scenario
5-Year Strategic Exit
$162.6M
Planned return component
20-Year Total
2.2x
Return multiple
Portfolio Type
Resilient
Multiple income streams
Conservative Modeling: Year 1 shows stress test with zero deaths. Actual mortality timing creates variability, but diversified income streams provide stability. Target 14.6% IRR after fees based on current market assumptions.

Investment Strategy

Capital Deployment Process

  1. Life Settlement Purchase: Buy $125M life settlement portfolio ($500M face value)
  2. Collateralized Borrowing: Borrow $150M against life settlements at par value
  3. Housing Authority Lending: Deploy borrowed $150M to housing authorities at 4.5%
  4. Equity Participation: Take 15% equity stakes in each development project
  5. ARNEX Deployment: Utilize $50M reserve for non-correlated returns

Management Approach

  • Portfolio Management (100 Policies): $5M average policy size for efficient institutional-scale management
  • 15% Equity Position: Meaningful ownership for governance rights and performance oversight
  • Project Selection: Active evaluation of development opportunities and housing authorities
  • Strategic Exit Planning: 6.5% cap rate assumption for Year 5 liquidity event

Risk Considerations

  • Mortality Timing: Primary variable affecting cash flow timing and sequence
  • Real Estate Markets: Property values impact equity exit returns in Year 5
  • Interest Rate Environment: Affects both housing operations and ARNEX performance
  • Premium Costs: Life insurance premiums may increase beyond projections
  • Regulatory Changes: Potential impact on life settlement or affordable housing sectors
  • Execution Risk: Performance depends on successful implementation of strategy

Investment Summary

The SHIELD Enhanced Portfolio Model targets 14.6% IRR (after fees) through a diversified strategy combining life settlements with affordable housing equity ownership. The 5-year strategic exit provides $162.6M return as a planned component of the investment structure for all participants.

Key Investment Features:
✓ Target 14.6% IRR after fund management fees
✓ 100 life settlement policies ($500M face value, $5M average size)
✓ 15% equity ownership in housing developments
✓ 5-year strategic exit with $162.6M planned return
✓ Multiple income streams for diversification
✓ Conservative Year 1 stress test (zero mortality) modeled

Risk Factors: Mortality timing uncertainty, real estate market conditions, interest rate environment, and execution risk. Suitable for qualified investors seeking alternative investments with target returns subject to market conditions and successful execution.