Victims of personal injury who recover damages in respect of their future losses are not ‘ordinary investors’. They have specific and often complex needs that must be met during their lifetimes. They should not have to take unnecessary levels of risk with their investments. High profile case law has supported this view over many years. Many claimants have no option other than to accept their damages in the form of a lump sum.

The discount rate of 2.5% was last reviewed by the Lord Chancellor in 2001. The discount rate is based on the yields available from Index Linked Government Stock (ILGS). In the current economic environment, personal injury victims have to invest in assets other than ILGS, as the required yields are simply not available. Nestor Partnership has actively lobbied the DCA on this issue to no avail. A vulnerable section of society remains exposed to the vagaries of the wider investment world.

If you would like to contact us about our communication with the Ministry of Justice click here.

Over the last 10-years we have experienced a period where investments have demonstrated significant levels of volatility. From the dot-com bubble, through 9/11, the ‘Bagdad Bounce’ and more recently the unprecedented volatility associated with the ‘credit-crunch’, the investment world has truly been turned on its head. Personal injury investors have been forced to learn the hard way about risk and its true meaning.

Investment portfolios in practice often bear little or no resemblance to how personal injury damages are calculated in the first place. Many of these clients have been treated as ‘ordinary investors’. Difficult markets have led to disillusioned and anxious families, desperate to know that their loved one will still have sufficient in the pot to meet their lifetime needs.

Many personal injury claimants, faced with these difficulties, have sought the shelter of cash, in exchange for perceived security. This, too, carries risk, in that it loses value over time due to the effects of inflation.

There are no easy answers to these issues. We have, however, given it some serious thought.

Nestor Partnership has many years’ experience advising this unique class of individuals. In conjunction with Seven Investment Management (7IM), we have created a unique fund which addresses many of these problems. It adds to the options available to all financial professionals advising personal injury claimants. The CF 7IM Personal Injury Fund takes into account:

1. The Legal Principles behind the calculation of future loss personal injury damages
2. A clear understanding of investment volatility and risk –v- return
3. A clear analysis of the expectations and needs of clients
4. A disciplined approach towards investment analysis
5. A realistic expectation of return

This fund is unique in its construction and provides a suitable solution for personal injury investors who are able to invest for the longer-term returns, but who do not want to take undue investment risk with their capital.

The aim of this fund is to:
"To provide a long-term total return from investment in a range of asset classes. There may be moderate risk to capital but the fund will be managed with the intention of limiting volatility to relatively low levels in normal circumstances. However, as a consequence, long-term return expectations may be lower than for higher risk portfolios"

The CF 7IM Personal Injury Fund differs in its’ approach to managing money by using crucial steps when determining the way that money is managed...

1. Setting the Initial Strategy.
   Using independent statistical data going back for over 30-years 7IM have analysed the returns and the risk/volatility of the various asset types including: shares, gilts, cash and property investments. By looking back, we can understand how investments have reacted during various investment conditions. Using this data and investment modelling techniques, 7IM construct the ‘Strategy Neutral Position’
2. Constructing the Fund.
   The ‘Strategy Neutral’ model is where 7IM start and wherever possible, 7IM use passive investment products, such as tracker funds. Their reasoning for this is simple....why add further risk by trying to select fund managers? Exposure to investment classes can be achieved via passive funds at much lower cost. The ‘Strategy Neutral Position’ reflects the cautious nature of the requirements of personal injury investors.
3. Manage/Monitor the Fund.
   The ‘Strategy Neutral Position’ is considered by 7IM’s investment committee on a regular basis. The committee consider the performance of the fund and, looking forward, have the ability to alter the neutral position, taking into consideration the view of the asset classes moving forward. This is known as the ‘Tactical Asset Allocation’ and is a vital part of the ongoing management of the Personal Injury Fund. This process enables the investment committee to alter the investment positions from the ‘Strategy Neutral’ position if required and necessary, given investment conditions. At all times, risk management is the key consideration and the 7IM investment committee will ensure that that the Personal Injury Fund maintains the correct asset allocation modelling to ensure that unnecessary investment risk is avoided.

We believe that steps to manage and control risk are vital when considering investment of Personal Injury Damages awards. The CF 7IM Personal Injury Fund is not suitable for everyone but we believe that it offers a truly unique investment solution for many victims of personal injury who want to ensure that investment risk is controlled using strict discipline and proven investment ideas.

For further information please contact us.

To download the CF 7IM Personal Injury Fund Brochure in PDF format click here

To download the Press Release and Media pack for the CF 7IM Personal Injury Fund click here

For further regulatory information including a copy of the Simplified Prospectus of the CF 7IM Personal Injury Fund click here

If you would like some further information about 7IM and their investment philosophy you can visit their website by clicking here.