RNS Number : 6769R
Alpha Growth PLC
04 March 2019
 

4 March 2019

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 will hold a General Meeting at 8:00am today and in advance of that is pleased to provide a general corporate update. Going forward the Company plans to provide a general quarterly update starting June 30th and when necessary to report material events. Shareholders should take comfort in knowing that your directors and executives are continuously working to create a world class asset manager.

Since the 2017 IPO, the Company has focused on establishing itself and building its team and brand in the longevity asset space. The Company was able to secure an initial mandate, as announced 20 December 2017, with a private wealth manager known to the executives, who intended to issue a €15 MM bond soon after the IPO. The proceeds received being invested into longevity assets. However, the wealth manager postponed the offering due to their own internal reasons, but the mandate remains in place with the wealth manager now considering the deployment of its client risk capital into the open-ended fund (see below) as a more relevant structure for its clients to invest in longevity assets.

 

In February of 2018, Alpha in conjunction with one of its advisers, a Big Four accounting firm, hosted a roundtable meeting of senior investment officers from the top 10 UK insurance companies to introduce and discuss the Company's proposed hybrid security investment product. Pursuant to this exercise two of the insurance companies are in continuing engagement with us, one of which has now matured to very advanced stages and hopefully towards a closing. This mandate contemplates a nine-figure sum to be allocated for life settlements.

Simultaneously, Alpha has been and continues to be in discussions with certain ultra-high net worth ('UHNW') investors and family offices, both in the UK and wider Europe, with regards to separate managed account ('SMA') investments to facilitate their exposure to SLS assets. These SMAs contemplate minimum allocations of $10 million.  On 7 June 2018, Alpha announced that it was collaborating with Devonshire Warwick in order to facilitate introductions and distribution to UHNW and family office investors which to date has generated over 60 qualified leads and 20 direct meetings to date. The Company continues to receive leads from Devonshire Warwick.  The Company prioritises discussions with these leads by the readiness of their allocation to advance them to an ultimate allocation. The internal process of allocating to a new manager is extensive and time consuming and taking longer now than ever before. Alpha's LSE listing and quality of its team, are providing excellent visibility and transparency to these investors.

In June 2018, the Company presented at The Alternative Investment Conference in Zurich Switzerland, organized by Swiss Financial Services. At this conference the Company's SMA product was pre-screened by investors and meetings were requested by them with the Company. The CEO and COO of the Company met with and spoke to over 10 pre-screened and qualified investors. From those conversations, two remain actively engaged and are advancing.  The Company has been invited back to attend this year's conference in June and asked to present to a larger group. The request of an additional presentation was precipitated by their clients desire to seek alternative investments that are uncorrelated. The continuity of the Company attending these select events, supports the relationship building and ultimate creation of mandates.

 

On 17 July 2018, Alpha announced the strategic acquisition of Alpha Longevity Management Limited ("ALM"), a dormant BVI registered licensed investment manager.  Through its joint venture with SL Investment Management Limited of Chester, England, ("SLIM") (as announced on 21 November 2018), the Company will be advising an open-ended fund that will invest in life settlements. It plans to provide this advice through ALM.  The Alpha Group (hereafter the "Group") and SLIM are excited by the prospects of the new open-ended fund which is set to be seeded by an existing pool of life settlements and cash worth approximately $10 million. The fund is expected to be launched in March 2019 subject to final regulatory approval by the Cayman Island Monetary Authority. This provides an immediate platform for the Group to springboard its marketing efforts which commenced shortly after the joint venture was announced.  These marketing efforts are in addition to the SMA and Hybrid discussions.

 

So far in the year to date, the Group has focused on closing and creating fee generative mandates. Following the acquisition of Colva we are now already generating revenue, and in the very short term we expect to generate material revenues from the fund which will launch this month.

 

The Directors continue to believe that as investors continue to seek yield and diversification of their investment portfolios, the market for advisory services for SLS Assets will grow.  Institutional investors seeking this diversification are expected to seek out experts rather than build in-house teams and this has been proven by the discussions with prospective investors. 

 

When compared to public equities, fixed income, currency trading, real estate, and private equity, SLS Assets are a small part of the investment spectrum, while still having multi-billion dollars in market volume.  Additionally, the Asset class is particularly complex. Hence, the Company believes that it is more cost effective for these investors to seek external advisory assistance and therefore is well positioned to take advantage of these opportunities.

 

The assessment of the Group's likely success in winning contracts continues to be based on the Directors' knowledge of the industry as it currently stands. However, the Group is reliant on each such prospective client's internal timings and processes. The fees generated from the Group's initial contracts will depend on the services required for each contract and discussions with the clients over fee structuring, including success-based fees. As can be appreciated, the quantum of the allocation being discussed with each prospect is significantly sufficient whereby the fees generated more than support the cost of deliverables required.  The directors believe that the capital expended to date has been foundational in creating the current and future business development opportunities. The management and directors continue to keep costs low and working towards a cash flow positive position.

 

The Group continues to build its team with the acquisition last month of Colva and its principal Rajiv Rebello, who will be the Group's Chief Actuary and Director of Investment Analytics.  By having our own in-house actuary, we are able to respond to client's need in a timely manner and build Alpha's intellectual property. We will also be announcing in the coming days further additions that will strengthen our reputation and offerings.

 

The Directors thank our shareholders for their continued support.

 

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

+44 (0) 20 3959 8600

Gobind Sahney, Executive Chairman

info@algwplc.com

 

 

Vox Markets (Digital IR)

+44 (0) 203 865 0130

Abraham Darwyne

content@voxmarkets.co.uk

 

 

Novum Securities Limited (Corporate Broker)

+44 (0) 207 399 9400

Colin Rowbury

crowbury@novumsecurities.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 wholistic solutions to alternative institutional investors who are in need of specialised skills and unique access to deploy their financial resource in longevity assets.

 


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