Hardly surprising, given the exceptional returns on this asset class - typically between 8% and 11% per year. And yet not so long ago few people this side of the pond were aware of the LS market.

But the market has long since mutated into the model we are much more familiar with today, the US senior citizens' life settlements. In a nutshell, this is a life insurance policy sold at a discount by the policyholder in order to unlock the benefits in their lifetime.

It's this discount that provides the investor with a return - the new owner receives the full benefits of the policy on the death of the original policyholder. One of the chief attractions of LS is that they provide a guaranteed payout, as policies are not linked to any form of investment performance.

Demand for this asset class has moved on apace. Currently thought to be worth in excess of $18bn and expected to grow to $160bn over the next few years, TLPs have naturally attracted interest from major investment banks, insurance companies, asset managers, hedge funds, and pension funds.

The market for LS is today based on US ‘whole life' policies sold by ‘seniors' usually aged 65 and over who have a medical condition that reduces their life expectancy, typically to between three and 15 years.

Unlike term assurance, which runs for a fixed period, whole life policies last a lifetime and in most cases are assignable, which means that a third party can buy the policy, maintain the premiums, and receive the benefits on the original policyholder's death.

The virtual collapse of traditional equities in the past 12 months has prompted a scramble among investors - both retail and institutional - for alternative asset classes delivering steady returns.

As risk is becoming a far more significant factor in determining the mix within an investment portfolio, it is perhaps little wonder that investors, reeling from the current market turbulence, are turning to safer investments.

Because the asset class is a relatively new game in town, there are bound to be question marks surrounding it, but there is no great mystery to how TLPs work.

In the States, for example, a citizen's life insurance policy is regarded as an asset in pretty much the same way as a property or car.

And if, as the insured, that citizen no longer needs the insurance, or is advised that they could get more appropriate cover, then they have the choice of letting the policy lapse, surrender it back to the life office or selling the policy on to an established secure second hand market.

A life office would typically offer the insured around 4% of face value if they chose to surrender the policy, whereas buyers in the second hand market are willing to pay around 30%. The buyer maintains the premium payments and on the maturing of the policy will receive the full face value.

The return to the buyer therefore is the difference between the face value and the acquisition and maintenance costs. But unlike with profits investments, say, the return is known and is not dependent on the investment strategy of the life office.

And unlike other so called ‘alternative' investments such as art or wine, once the policy is purchased, the return does not fluctuate as a function of supply and demand.

So much for the positives, and clearly there are many. It is not for nothing that this is currently the fastest growing asset class de jour.

Many IFAs view LS as an excellent investment proposition for their clients but may not have the time or inclination to delve into the mechanics of why one fund has the appropriate means to discount price each policy, provide appropriate periodic valuations and manage ongoing asset selection. These are important factors because the US LS market lacks pricing transparency. One buyer's interpretation of fair value may be very different to another's.

But, whichever way you look at it, LS are a recession busting asset delivering consistent returns - which is more than can be said of any other contemporary asset class.

Andrew Walters is finance director of Policy Selection, manager of Assured Fund