LONDON: Alpha Growth Plc, a leading financial services specialist in the growing longevity asset class, signed a share purchase agreement to acquire a Bermuda based holding company and its wholly owned insurance company.
This is a transformative deal for Alpha Growth and represents a significant building block in the company’s continued evolution, the deal adds substantial assets under management to the group and is earnings accretive.
Following the completion of the acquisition, it is expected that Alpha Growth will be EBITDA positive.
The acquisition includes the ongoing operations of a Bermuda based Class C licensed insurance company with managed assets of over $290m and in-force policies of over $750m.
Ninety-five percent (95%) of the insurance holding company is being acquired by a wholly owned subsidiary of Alpha Growth, with the remaining 5% being retained by the existing Chairman and seller of the company.
The seller and Chairman of the insurance company will remain on the Board of Directors of the holding company and will be joined by Gobind Sahney and Jason Sutherland.
The licensed insurance company provides an excellent platform for Alpha to offer life insurance-based wealth management products, life insurance linked funds such as the BlackOak Alpha Growth Fund, and longevity risk coverage that enhance longevity asset backed securities created by Alpha and other sponsors. All activities are subject to regulatory approval and oversight.
Alpha Growth intends to aggressively grow this business utilising a build and buy strategy, there is also a significant opportunity to market our existing strategies to clients of the insurance business.
The acquisition is subject to the approval of the Bermuda Monetary Authority and is expected to complete this quarter, further updates and information will be provided in due course.
Business Update:
Company announced the BlackOak Alpha Growth Fund achieved a net return of 10.63% for the calendar year 2020, this earned the Fund a top 5 position in the prestigious BarclayHedge yearly performance rankings in the Fixed Income – Asset-Backed/Insurance Linked Securities category for 2020. This is a great achievement for both the Fund and those that invest in it.
Over the course of 2020, the Fund grew by more than 100% and now has over $22 million in AUM – the Fund continues to be very popular and attract new investors, we anticipate continued growth throughout 2021 and beyond.
To simplify the in-person due diligence requirements, this process now includes direct asset investments by the asset manager. The Company is in the process of reviewing opportunities for these direct asset purchases which will further contribute to our assets under management and fee revenue.
The company also continues to progress the Alpha Growth & Income (AGI) strategy, this strategy is a combination of life settlements and life contingent structured settlements hedged by a life insurance policy that is suitable for investors seeking cashflow and growth, funded in either a separate managed account or as a co-mingled fund with a minimum investment of $50 million.
Gobind Sahney, Executive Chairman of Alpha, commented: “2020 was an important year for Alpha Growth, despite the restrictions placed on the global business community by the Covid-19 pandemic we managed to more than double the BlackOak Alpha Growth Fund whilst also launching a number of key strategies to grow the business.
We expect the continued growth of the Fund will help attract larger investments and it should also benefit from achieving a top 5 category position in BarclayHedge’s overall annual performance ranking for the calendar year 2020, this award is in addition to the 4 monthly BarclayHedge awards received throughout 2020.
Today’s acquisition announcement is a significant step forward for the company and demonstrates the ambition of Alpha Growth as well as the scale of the future opportunity. Once the acquisition completes the Alpha Growth group of companies will have circa $300m assets under management, this represents a significant increase from the $10m AUM at the beginning of 2020.
The placement, which was oversubscribed with minimal discount to the share price, is a sign that the investment community is excited about both our past performance and our future potential.
I would like to thank all our shareholders for their continued support as we build Alpha Growth into a significant financial services organisation.”
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