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Alpha Growth seeking to expand its consultancy for investors in longevity assets

  • Financial advisory business in the growing Senior Life Settlement (SLS) asset class
  • A life settlement refers to the sale of an existing US insurance policy to a third party for a one-time cash payment
  • According to a study, $200 billion worth of life insurance will lapse or be surrendered each year through 2027

What Alpha Growth does:

Alpha Growth PLC (LON:ALGW) (OTCQB:ALPGF) is a financial advisory business providing specialist consultancy, advisory and supplementary services to institutional and qualified investors globally in the growing multi-billion dollar Senior Life Settlement (SLS) asset class.

A life settlement refers to the sale of an existing US insurance policy to a third party for a one-time cash payment. Payment is more than the surrender value, but less than the actual death benefit. After the sale, the purchaser becomes the policy’s beneficiary and assumes payment of its premiums. By doing so, the buyer receives the death benefit when the insured dies.

Building on its well-established network, Alpha Growth has a unique position in the longevity asset services and investment business as a UK and US-listed entity with global reach.

The company’s strategy is to expand its advisory and business services via acquisitions and joint ventures in the UK and the US to attain commercial scale and provide wholistic solutions to alternative institutional investors who are in need of specialised skills and unique access to deploy their financial resource in longevity assets.

In addition, the group’s BlackOak Alpha Growth Fund, provides non-correlated, strong returns in a tax-efficient manner. The fund invests in life settlements targeting annual returns in the 10% to 14% range.

According to a study by investment firm Conning, $200 billion worth of life insurance will lapse or be surrendered each year through 2027 — all of which could qualify for a life settlement and be pocketed by the policy owner.

How is it doing:

Alpha Growth started 2021 with news of an expansion, announcing, on February 11, that it is acquiring an unnamed Bermuda-based insurance company supported by an oversubscribed GBP3.75mln share placing.

The group said the deal, which will be earnings accretive, “represents a significant building block in the company’s continued evolution”. The Class C licensed insurer has assets under management of US$290mln and in-force policies of US$750mln.

Once the transaction completes, Alpha will have around US$300mln assets under management compared with just US$10mln at the start of last year.

The company also said it “continues to progress” the Alpha Growth & Income strategy. This is a combination of life settlements and life contingent structured settlements hedged by a life insurance policy that is suitable for investors seeking cash flow and growth.

The group said this will be funded in either a separate managed account or as a co-mingled fund with a minimum investment of US$50mln.

Alpha Growth also said it has almost completed discussions to secure a short term credit facility.

On January 15, Alpha Growth had announced year-end results for its BlackOak Alpha Growth Fund which, on a net basis, showed the fund produced a 2020 calendar year return of 10.63% and a 13.71% total return since inception in September 2019.

This placed BlackOak in the top five BarclayHedge yearly performance rankings in its category. Assets under management for the fund have doubled in this period.

Alpha Growth said it continues to actively market to registered investment advisors in the US and to look at supplementing the direct outreach with virtual events in the US that showcase the fund.

With its December listing on the US OTCQB market, Alpha Growth added, it intends to closely coordinate the US marketing of the fund with greater reference to the company so US investors are able to follow the holding company of the general partner and investment manager of the fund as well.

Alpha Growth shares commenced trading on the OTCQB Market operated by OTC Markets Group Inc (OTCQX:OTCM) under the ticker symbol ‘ALPGF’ on December 16, 2020. The financial services specialist’s ordinary shares continue to trade on the London Stock Exchange’s Standard List market under the symbol ‘ALGW’.

The firm said the listing on the OTCQB Market allows its ordinary shares to be traded by broker-dealers in the United States. Alpha was sponsored by B. Riley Securities, Inc., a registered broker-dealer with FINRA. Initially, B. Riley will act as the company’s market maker in the US. Pello Capital continues to be the company’s corporate broker in the UK.

Inflection points:

  • More news on Bermuda-based insurance company acquisition
  • Completion of discussions to secure short term credit facility.
  • Alpha Growth & Income strategy growth
  • BlackOak Alpha Growth Fund assets to reach target range

What the boss says:

Commenting to Proactive at the time of the BlackOak Alpha Growth Fund results in January, Gobind Sahney, chairman and CEO of Alpha Growth PLC said: “For our first full calendar year, I am very pleased that we delivered on our stated objectives of capital appreciation with low correlation and low volatility relative to the broader markets given the challenges of 2020. It proves that we are able to deliver returns in an efficient manner and look to build on it moving forward.

“We can assure our investors that we use the latest in actuarial information for all of our investments and apply a valuation methodology that is transparent and accountable. We want to help build, protect, and maintain wealth for our investors.”

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