Lindsell Train's unusual take on key man risk

Lindsell Train’s unusual take on key man risk

Among the regular wave of investment trust updates to the stock exchange, one in particular stood out last week: the Lindsell Train trust's decision to take out life insurance on both its managers.

The idea of businesses taking out key man life policies is nothing new, particularly in an industry as people-driven as fund management. Anecdotal evidence suggests many managers are either insured now, or have been in the past, particularly if they are or were significant figures in a relatively small business. This does not mean last week’s move is an everyday event in the closed-ended space. Far from it. As one investment trust broker emphasised, it is practically unheard of for a board to take out a policy on external managers. While life insurance is a different matter to a ma...