Alpha Growth’ subsidiary acquires Guernsey based life insurance company
LONDON, UK: Alpha Growth Plc (LSE: ALGW) announced that its Bermuda subsidiary has signed a share purchase agreement to acquire a Guernsey based life insurance company. This transaction advances Alpha’s acquisition strategy of consolidating life insurance companies and represents a significant step towards achieving Alpha Growth’s goal of managing over $2bn of assets by 2025.
The Guernsey based insurance company is a Category 1, international life insurer, with approximately 3,785 long-term life insurance contracts in force as of 31 December 2021.
The acquisition has a transaction value of ~$3.3m and includes all operations of the company, including its assets under management of approximately $370m as valued at 31 December 2021. The business is being acquired from a major international insurance group.
This acquisition more than doubles Alpha’s assets under management and provides an excellent platform for Alpha to offer both life insurance-based wealth management products and life insurance linked funds, either originated by Alpha or through other partners.
Additionally, the life insurance company provides a good European based platform for further acquisitions. All activities are subject to regulatory approval and oversight.
The Directors of the Company’s subsidiary Providence Life Assurance Company (Bermuda) Ltd (Gobind Sahney, Jason Sutherland, and Dan Gray) will be joining the acquired company’s board.
The acquisition is subject to the approval of the relevant regulatory authorities and is expected to complete sometime mid-year. Further updates and information will be provided in due course.
The Company is funding the acquisition from operations, and it will not require an equity raise.
This acquisition is a key building block in delivering upon the Company’s previously announced 2B Plan. The 2B plan is Alpha’s strategy to be managing over $2bn of assets by 2025.
Once the acquisition is completed, the Company’s aggregated assets under management will be over $700m. This provides the Company with a substantial source of predictable, sticky and recurring revenue and represents a 70 fold increase in AUM from the $10m that the Company reported in January 2020.
With this acquisition, and taking into consideration the excellent prospects of both Alpha’s Fund and its Insurance segments, the Directors have decided to concentrate the Company’s focus on these two key segments. By focusing on these two key segments, it allows the Company to direct its resources and human capital efficiently to ensure that maximum growth and shareholder returns are achieved.
As a result, the Company will be ceasing discussions with counterparties in regards to separate managed accounts, revolving credit facilities, and other esoteric AUM building activities. Whilst these activities would have increased AUM, the Company has other prospects which provide better returns and which require less overhead.
This refocusing of activities creates a strong and simpler proposition with substantial value creation opportunities – the focus for 2022 will be to continue to aggressively expand both the fund and insurance segments.
The BlackOak Alpha Growth Fund has grown from $10m to over $50m since 2020 and once the acquisition is completed the insurance segment will have grown from zero to over $650m.
Additionally, the Company’s subsidiary Providence Life Assurance Company, as part of the insurance segment, also issued its first policy since it became part of the Group for a $5m committed premium this month and continues to expand its plan of distribution for its policies through registered investment advisors and other professionals that advise ultra-high net worth individuals and family offices on PPLI.
The Company continues to have a very strong pipeline of opportunities across both segments and we are very confident that these opportunities will drive significant increases in AUM and the associated fees. We expect to make further announcements in due course.
Gobind Sahney, Executive Chairman, commented “This acquisition is another key building block in our plan to be managing over $2bn of assets by 2025 and I’m very pleased to announce that we are currently tracking ahead of schedule to achieve that aim.”
Gobind continued, “This acquisition not only increases our AUM substantially, it also provides us with the ability to offer very tax efficient insurance based wealth management products and will also serve as a European vehicle for further value accretive acquisitions.”
Alpha Growth will be responding to shareholder questions by the end of this month and shall be announcing its end of year accounts by the end of April.
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