TIDMALGW
RNS Number : 4101T
Alpha Growth PLC
20 July 2020
Alpha Growth plc
("Alpha", or the "Company")
Corporate Update
Alpha Growth plc (LSE: ALGW), the financial services specialist
in the growing Senior Life Settlement ("SLS") asset class is
pleased to provide the market with a corporate update on the
Company's business. This release provides an update on the Impact
of Covid-19 and addresses shareholder questions that the Company
has received since its last update on 27(th) April 2020.
BlackOak Alpha Growth Fund - Since the end of April 2020, the
Company on the back of successful marketing activity, the Fund has
seen a significant rise in interest from registered investment
advisors ("RIAs") in the USA and family offices. The Company is
marketing through email and telephone to over forty-two thousand
RIAs which currently are in the Company's CRM system (with this
number increasing). The open, click, and reply rates have increased
along with the number of investment conference calls per week. Next
steps involve the RIA conducting due diligence on the Fund and
manager. Several major RIAs have commenced this detailed step with
the Company.
The Company will be reporting fee revenue received in relation
to the Fund for its fiscal year ending in August.
Separate Managed Accounts and Sub-advisory roles - The Company
has entered into discussions with sponsors of proprietary funds to
manage the longevity assets within those funds or what are known as
separate managed accounts.
When shareholders noticed on a third party website that Danny
Swick, Alpha's COO, would be speaking at a family office conference
in February, as the portfolio manager of a longevity fund, it
provided a good example of the Company's activity in this part of
the business. The web posting was made by the fund's sponsors and
the RIA hosting the conference intended that the conference would
be the initial unveiling of a new fund.
The new fund is an open ended limited partnership (which is a
typical structure) and to launch involves not only the required
legal documentation but also establishing the investment strategy
with the sponsor, coordination of marketing material, investor
meetings and asset management processes, among other matters.
Alpha's role is to act as an advisor on all of the above functions
and its executives take on certain roles in the fund in title only
through its agreement with the sponsor. The cost of all the above
functions and raising the capital is the responsibility of the
fund's sponsors. Alpha would collect a percentage of the management
and performance fee for its services once a fund is launched. In
the ordinary course, such mandates typically take between nine to
twelve months to get to the launch stage if all goes well, however
the escalation of Covid-19 has delayed a launch and will be
revisited. The Company will only make a further announcement on its
engagement once the sponsor has officially approved the launch.
Warehouse Loan/Short Term Credit Facility - In early July, the
Company resumed discussions with the counterparty to determine the
next steps in the establishment of the Warehousing facility. The
counterparty noted that they are looking forward now and that the
internal issues they faced due to Covid-19's effect on their
business are being managed. The Company will provide further
updates as discussions progress.
Development of New Strategy - Alpha Growth is pleased to
announce the development of the Alpha Growth & Income ("AGI")
strategy, a dynamic response to developments in the marketplace
over the past several months. The 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. A
structured settlement is an arrangement whereby the plaintiff,
usually aggrieved in an accident, agrees to resolve a tort claim by
receiving periodic payments under an annuity contract on an agreed
schedule rather than a lump-sum payment at the time of settlement.
Payments are typically guaranteed but can become life contingent
after the end of the guaranteed payment period, making it a
longevity asset and is payable by an insurance company. A
structured settlement can provide positive cashflow during its hold
period. The AGI can provide the investor an annual cash flow
through the structured settlement asset and growth in the principal
invested through the life settlement asset. As part of the
development process, it was introduced to select institutional
parties . The Company will continue to promote and seek clients for
this strategy.
Operational Update
-- The Company continues to maintain a lean operating structure
-- Sufficient working capital for its current strategies
-- Engaged with Proactive Investors a financial media portal to
expand its outreach to existing shareholders and prospective
clients
-- A lpha has been added to the Pello Capital Spotlight page to
provide additional sources of information to shareholders
-- Planned improvements to the Company website
-- Planned hire of additional director put on hold until increase in corporate activity
The impact of Covid-19 has no doubt had an effect on the timing
of various counterparties to transact with the Company. As
previously stated, there will be an impact on Company's financial
results in FY20 if delays should continue for an extended period of
time.
The Company is still confident that, particularly with record
low interest rates, continued volatility in the equity markets and
the non-correlation of SLS assets, it will be able to continue
those discussions in the near terms, and also take advantage of
further opportunities as and when they arise.
The Directors thank the shareholders for their continuing
support and look forward to making progress on all strategies in as
timely a manner as possible. Further details are provided on the
Company website www.algwplc.com .
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For more information, please visit www.algwplc.com or contact
the following:
Alpha Growth plc: Gobind Sahney, Executive Chairman +44 (0) 20
3959 8600 i nfo @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.
SLS Assets and Non-correlation
A SLS refers to the sale of an existing life insurance policy to
a third party for a cash payment. Such a payment will be in excess
of the policy's surrender value, but less than its face value.
After the sale, the purchaser becomes the policy's beneficiary and
assumes payment of its premiums. There are many reasons why policy
holders may choose to sell their life insurance policies and sales
are usually only undertaken when the insured person doesn't have a
known life-threatening illness. The SLS provides individuals with
policies the option to realise value from an asset under a
regulated transaction. As a longevity asset, the SLS 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 SLS Assets that
originate in the USA where the SLS 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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