REG - Alpha Growth PLC - Acquisition and Insurance Business Update

Alpha GrowthAnnouncement

24/03/2022 07:01

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RNS Number : 8064F  Alpha Growth PLC  24 March 2022

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014 (as in force in the United Kingdom pursuant to the European Union
(Withdrawal) Act 2018). Upon the publication of this announcement, this inside
information is now considered to be in the public domain

 

 

Alpha Growth Plc

("Alpha", or the "Company")

 

Acquisition and Insurance Business Update

 

Alpha Growth Plc (LSE: ALGW and OTCQB: ALPGF), a leading financial services
specialist in the growing longevity asset class, is very pleased to announce
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.

 

Acquisition

 

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.

 

Delivering on The 2B Plan

 

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.

 

For more information, please visit www.algwplc.com or contact the following:

 

 Alpha Growth Plc                                              +44 (0) 20 3959 8600
 Gobind Sahney, Executive Chairman                             info@algwplc.com (mailto:info@algwplc.com)

 Arden Partners plc                                            +44 (0) 20 7614 5900
 Ruari McGirr / Alexandra Campbell-Harris (Corporate Finance)

 UK Investor Relations - Mark Treharne                         ir@algwplc.com (mailto:ir@algwplc.com)

 

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.

 

Important Notice

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.

 

ENDS

 

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