LONDON, UK / ACCESSWIRE / February 11, 2021 / Alpha Growth Plc (LSE:ALGW)(OTCQB:ALPGF), a leading financial services specialist in the growing longevity asset class, is pleased to announce the signing of 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.
To support the acquisition, Pello Capital has successfully completed an oversubscribed placing of £3,750,000.
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.
We are also pleased to announce that the BlackOak Alpha Growth Fund (the “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.
As previously announced, the Company’s discussion with the Warehouse Loan/Short Term Credit Facility counterparty are almost concluded and an update will be provided during Q1. 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. Its anticipated that this strategy is complementary with the announced acquisition.
Updates will be provided on all the strategies at an appropriate time.
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.”
The Placing, which will raise gross proceeds of £3,750,000, was completed at a price of £0.02 per share with a warrant to subscribe for an additional share at £0.03 valid for two years from admission. The 187,500,000 Placing Shares being issued represent approximately 77.8% per cent of the existing issued ordinary share capital of the Company immediately prior to the Placing.
Subject to the completion of the Placing, Pello Capital will be awarded 18,750,000 warrants exercisable at the placing price of £0.02p valid for two years.
In light of the Placing and the subsequent dilution to existing shareholders, the Company announces that it will not make any use of the subscription facility noted in its Prospectus of 2 September 2020 and that it will close the subscription. The Company has not made the facility available or issued any shares pursuant to it.
The issue of the Placing Shares is expected to take place on 8 March 2021 and is conditional on: (i) the Company passing certain resolutions at its forthcoming annual general meeting to authorise the issuance of the Placing Shares (ii) on the Financial Conduct Authority approving a prospectus in accordance with the Prospectus Rules and (iii) the Placing Shares being admitted to listing on the Official List (standard listing segment) and to trading on the London Stock Exchange’s main market for listed securities. The Placing Shares will rank pari passu in all respects with the existing ordinary shares.
Further announcement will be made in due course in respect of the annual general meeting and when the Prospectus has been published.
For more information, please visit www.algwplc.comor contact the following:
About Alpha Growth plc
Specialist in Longevity Assets
Alpha Growth plc is a financial advisory business providing specialist consultancy, advisory, and supplementary services to institutional and qualified investors globally in the multi-billion dollar market of longevity assets. Building on its well-established network, the Alpha Growth group has a unique position in the longevity asset services and investment business, as a listed entity with global reach. The group’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 holistic solutions to alternative institutional investors who are in need of specialised skills and unique access to deploy their financial resource in longevity assets.
Longevity Assets and Non-correlation
As a longevity asset, it is non-correlated to the real estate, equity capital and commodity markets. Its value is a function of time because as time passes the value gets closer to the face value of the policy. Hence creating a steady increase in the net asset value of the investment. This makes it highly attractive to investors wishing to counteract volatility within an investment portfolio and add yield.
Note: The Company only advises on and manages Longevity Assets that originate in the USA where the structured and life settlement market is highly regulated.
Forward Looking Statements Disclaimer
Certain statements, beliefs and opinions in this document are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’ current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward- looking statements, which speak only as of the date of this document. Readers should not treat the contents of this document as advice relating to legal, taxation or investment matters, and are to make their own assessments concerning these and other consequences, including the merits of information and the risks. Readers of this announcement are advised to conduct their own due diligence and agree to be bound by the limitations of this disclaimer.
The content of this announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (FSMA). This announcement has been issued by and is the sole responsibility of the Company. The information in this announcement is subject to change.
This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold, directly or indirectly, in or into the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations (a Prohibited Jurisdiction). This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.
Pello Capital Limited (Pello) is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Pello is acting solely as the Company’s broker and placing agent in relation to the Placing and for no one else in connection with the contents of this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the contents of this announcement nor will Pello be responsible to anyone other than the Company for providing the protections afforded to their clients or for providing advice in relation to the contents of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Pello by FSMA or the regulatory regime established thereunder, Pello accepts no responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Pello accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.
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SOURCE: Alpha Growth PLC
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