L’life insurance passes for the available investment par excellence. This image deserves a nuance today. Since October 24, 2024, the green industry law imposes a minimum share of assets unlistedprivate equity, private debt or infrastructure, in the balanced and dynamic profiles of managed management, i.e. at least 4% for a balanced profile and 8% for a dynamic profile. The measure targets new contracts and payments, without affecting savings already invested. A simple question remains for the subscriber. Can you always get your money back whenever you want?
The response is reassuring, with one reservation. In the vast majority of cases, yes. This is theinsurer which carries the repurchase commitment, so that the liquidity of the contract is not confused with that of the supports held. Redemptions are also executed within a few days, and at the latest within the legal period of two months. Sandrine Brasleret, heritage engineer and founder of the consultancy firm wealth management Solidus Invest, however, sets a clear limit. “In summary, liquidity exists, but it is no longer guaranteed “at any time and unconditionally” on 100% of the outstanding amount. »
Why your life insurance remains liquid most of the time
The mechanics remain protective. During a partial or total redemption, the contract is disinvested in proportion to the funds held, unless otherwise instructed. On the euro fund and listed units of account, the exit is almost immediate. For the unlisted pocket, the insurer most often plays a role ofshock absorberby providing the liquidity necessary for the repurchase. “The liquidity of the contract is not to be confused with that of the assets held within the units of account »summarizes Sandrine Brasleret. This is the most common situation today.
However, certain media escape this fluidity. THE evergreen fund or some FCPR provide by contract for redemption windows periodicals, ceilings withdrawals called gatesor even temporary suspensions in the event of an influx of requests. In these cases, part of the redemption may be subject to the fund’s timing or deferred settlement, and thesaver then indirectly bears part of the illiquidity risk.
The discount remains exceptional in a classic buyout. But the valuation of unlisted occurs less often than that of listed markets, and it can be revised downwards when the economic situation deteriorates. The real subject is therefore not the impossibility of getting your money back, but a arbitration. Part of the availability immediate is exchanged for an expectation of yield superior in the long term.
The two moments when liquidity seizes up, and how to prepare for them
Two situations make these mechanisms more restrictive. The first is a wave of simultaneous releases, typically in the middle of financial crisiswhen many investors want to recover their funds at the same time. The second is the need to quickly remove the totality of a contract of which a significant part is still in unlistedin the investment phase. Hence a rule of common sense. The unlisted asset is not intended to serve as a precautionary reserve that can be mobilized overnight.
Three reflexes allow you to keep your hand. First, precisely identify the unlisted part of your contract, information which appears on the situation statements and supporting information documents. Then look at the exit arrangements and not only the performance displayed, therefore the existence of liquidity windows, gates, blocking periods, settlement times and the valuation frequency. One question is enough to clarify everything with your advisor. “If I need to recover my savings quickly, how does this happen in practice and in what time frame? »
Finally, anticipate. When a project is looming in the medium term, real estate purchase, children’s studies, retirement or transfer, it is often wise to reduce exposure to unlisted assets several months before the deadline, rather than arbitrating at the last moment in a degraded market. Used well, unlisted assets have their place in a diversified wealth strategy. Provided we see it for what it is, a long-term asset, and not a reserve immediately available.
Article for information purposes. It does not constitute investment advice. Units of account, particularly unlisted, carry a risk of capital loss and reduced liquidity.
