• 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 announced on December 16, 2020, that it had commenced trading on the OTCQB Market in the United States operated by OTC Markets Group Inc (OTCQX:OTCM) under the ticker symbol ‘ALPGF’. The financial services specialist said that its ordinary shares will continue to trade on the London Stock Exchange’s Standard List market under the symbol ‘ALGW’.

The listing on the OTCQB Market will allow Alpha’s 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.

The company said it at the same time that it continues to be confident that through continuing low-interest rates, continued volatility in the equity markets and the non-correlation of SLS assets, it will be able to continue its strategies, and “take advantage of further opportunities as and when they arise in the longevity asset sector”.

At the start of November, Alpha Growth revealed that assets under management (AUM) at its BlackOak Alpha Growth Fund have grown to roughly US$20mln in spite of an impact earlier in the year from the coronavirus (COVID-19) disruption.

The firm said it received US$7.6mln in subscriptions in October alone. The growth in AUM was significant because some investors are prohibited from comprising more than a certain proportion of a fund’s assets, thus as the fund grows, so the range of potential investors grows.

The fund continues to perform well and is on course to provide a return within the 10% to 14% target range, Alpha Growth added. For the months of August and September 2020, the returns were 1.82% and 1.42% respectively.

The company also said discussions with a warehouse loan/short term credit facility counterparty continue and were nearing a conclusive step but the counterparty’s coronavirus (COVID-19) policy is limiting its ability to conclude site visits to the company’s and its servicing agents’ US-based offices.

The group added that it has begun its promotion of the Alpha Growth & Income (AGI) strategy. As previously announced, 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 cash flow and growth, funded in either a separate managed account or as a co-mingled fund with a minimum investment of US$50 million.

On the financing front, in August, Alpha Growth raised £500,000 to fund the development of its strategy. Shares equivalent to 17.4% of the capital prior to the issue were placed at 1.4p, a 17.6% discount to its previous closing price.

Inflection points:

  • Alpha Growth & Income strategy growth
  • BlackOak Alpha Growth Fund assets to reach target range
  • News on warehouse loan/short term credit facility counterparty

What the boss says:

In a statement accompanying news of the group’s OTCQB listing, Gobind Sahney, CEO of Alpha Growth, said: “This is another milestone in Alpha’s development as we drive increased awareness in the US of our BlackOak Alpha Growth Fund.  We are marketing to over 30,000 Registered Investment Advisors who wish to learn more about the fund’s general partner and follow Alpha’s growth and invest in its shares.”