Hedge fund manager Paul Regan, the founder of Next Level Holdings LLC, believes that somewhere along the line, we lost sight of the purpose of our money: to work for us, not for other people.
“I’m not knocking the investment industry – I work in it, after all – but we all bought into this idea that while it was necessary to rely on financial experts to invest our money, they got to set the terms, which weren’t very good. Who made that rule? To me, that makes no sense,” he says. “Look at annuities, as an example. If you’re lucky, you’ll earn 5-6% at the most, and this is money that’s meant to be your income for retirement. I decided to smash the annuity model and create one that generates 24% – guaranteed.”
In reinventing annuities, Regan kept what worked and threw out what did not. A predictable income, comfortable retirement, and preparation for inflation and cost-of-living increases were all “in.” The unpredictable returns, long-term contracts, bad yields, and high fees were “out.”
“I am a bit of a financial engineer and enjoy solving problems, so I sat down one night and drafted our Enhanced Annuity Product, which proves that a guaranteed, consistent 24% return is doable,” Regan remembers. “It came down to thinking outside of the box: arbitrage trading.”
For over 20 years, Regan had been an arbitrage trader, carving out a niche for himself in specialized markets. He had become an expert at taking advantage of price discrepancies between the same investments in different markets. He bought gold, for example, in one market while simultaneously selling an equivalent amount in a different but related market, ultimately taking advantage of price divergences between the two.
“The profits in arbitrage are possible because global markets do not operate with complete efficiency. Information in one part of the world may not travel as quickly as it does elsewhere, leading to different share prices,” he explains. “By turning over my capital 3-4 times every 30 days, I secure quick profits. I was already seeing 9-12% returns, which were higher than an annuity’s. At Next Level Holdings, by increasing our monthly transaction volume, we can generate returns of around 80% per annum after expenses. About one-third of that, or around 24%, goes straight back to investors in our fund.”
Next came the easiest and hardest part: guaranteeing those double-digit returns. Dedicated insurance policies were the obvious solution, but convincing the world’s top insurance carriers, including Lloyds of London, to protect an investor’s principal and interest was not exactly simple to do.
“I don’t give up easily, thankfully,” Regan laughs. “I approached them with a scalable, sustainable model and the logic to back it up. Our investment risk could be measured and minimized to specific levels, more so than the risk involved with cars or homes. They saw the potential in our product, but even so, I still slogged through nearly two years of financial audits. I even had to put up eight figures in counter-guarantees to further satisfy them.”
In the end, however, Regan succeeded, and today his company offers the impossible: an Enhanced Annuity Product that guarantees a 24% return. By combining specific trade, finance, and arbitrage-based strategies with dedicated insurance policies from licensed and regulated insurance companies, all of whom carry investment-grade ratings from AM Best, the credit rating issuer for insurance carriers, each investment is backed.
“And yes, that 24% return is guaranteed,” says Regan. “They are low expense, high performing, and for 3, 5, 7, and 10 years. What Next Level Holdings is really about is giving power back to the investor. Remember, it’s your money. You earned it. You should be able to have annuities that are designed for you and your future, and now you can, no matter what the market may do.”
