Business Update - 2022 Focus and the 2B Plan

RNS Number : 9386C

Alpha Growth PLC

28 February 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")

Periodic Business Update - 2022 Focus and the 2B Plan

Alpha Growth Plc (LSE: ALGW and OTCQB: ALPGF), a leading financial services specialist in the growing longevity asset class, is pleased to communicate its future strategy for growth whilst updating shareholders on overall company performance and communication initiatives.

The Company's development has been transformational in 2021 and with the new year, the Directors wanted to provide the shareholders with the following details on the Company's focus for 2022 to set the stage for its continued growth.

The 2B Plan

We are very excited to put forth our future growth strategy - The Alpha Growth 2B Plan.

The 2B plan is Alpha Growth's ambitious but achievable objective to be managing over $2bn of AUM by 2025, this will provide the Company with a significant source of predictable and recurring revenue. This significant growth in AUM will be achieved by continuing to execute upon our build and buy strategy, as well as by offering a number of new, complementary and innovative strategies to our clients. 

To support our buy strategy, we have an established acquisition methodology with a strong pipeline of targets which will substantially increase AUM. We expect to update our shareholders this quarter on the progress of this part of the strategy.

The Company does not anticipate an equity raise to complete any of the current targeted acquisitions and believes that future acquisitions can be supported, where required, by the exercise of the outstanding warrants.

To support our build strategy, we will aggressively grow AUM organically by continuing to market our strategies to institutions, family offices and high net worth individuals.  However, we also plan to offer our strategies to a wider audience of investors by launching a product with reduced financial entry commitments on both the insurance and fund segments of the Company, we expect this to be a key driver of future fund growth. 

In addition, our build strategy will be further supported by a number of initiatives to expand our marketing and distribution in both our fund and insurance segments.

Further information regarding our 2B strategy will be provided in due course.

BlackOak Alpha Growth Fund Update

Following on from its previous statements earlier this month on the BlackOak Alpha Growth Fund ("Fund"), the Directors are pleased to report that the Fund has enjoyed a strong start to the year and achieved new subscriptions into the fund in January and February of approximately $4m. This brings our total AUM for the fund closer to $50m and increases the visibility of the fund to a larger investor audience which uses the $50m minimum as a benchmark.

Recent market volatility caused by world events further underpins the appeal of a fund which provides returns that are uncorrelated to the stock market. We expect further strong interest moving forward.

Insurance Business Update

Further to its previous announcement earlier this month, the Company's insurance business, Providence Life Insurance Company Ltd (PLAC) continues to add to the Company's combined assets under management.

Private Placement Life Insurance continues to be a highly sought after insurance linked wealth management strategy by ultra-high net worth individuals and family offices. As a segregated account company, PLAC offers private placement life insurance (PPLI) and annuity (PPVA) policies.

Since the acquisition, PLAC has put in place the systems and processes for the direct origination of PPLI and PPVA policies. As part of its future growth strategy, PLAC has commenced a 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.

PLAC will issue its first policy this month for $5m in total premiums. The premiums in a PPLI are essentially the assets under management.

Since acquiring PLAC in March 2021, the assets under management in the segregated accounts are over $277m with total assets of approximately $290m and producing total business income, essentially the fees earned on asset management, of circa $1.1m for 2021.

Whilst the client base remains steady, due to the more correlated nature of the insurance offering, the value of assets does fluctuate, and the stated figures are just snap shots in time.  With the broader market experiencing volatility in the fourth quarter, the figure does represent a slight decrease to where the market was mid 2021. PPLI's are structured for multi decade asset holdings and the AUM will fluctuate over time, as markets recover the AUM will increase.

This underpins the Company's strategy of providing different investment options within both the longevity asset sector and insurance linked wealth management sector, investors choose their preferred strategy based upon their investment objectives. 

Shareholder Communications

The Company recognises the importance of good shareholder communications and has launched an initiative to ensure we provide both current and prospective shareholders the information they need, when they need it.

This initiative has 5 pillars.

1)  Explain our company: As Alpha Growth continues to grow and adapt we need to ensure we provide everyone with a complete overview of who we are and what we do as a company.

2)  Promote our achievements: We have already achieved a huge amount with lots more to come, we now need to actively promote our achievements to the investment community.

3)  Communicate our strategy: We have a well-defined growth strategy; we need to build this into an investment proposition and communicate it to both current and future shareholders.

4)  Attract Institutional Investors: Our shareholder base is primarily retail based currently and we believe we can further support the share price by attracting institutional investors onto our share register.

5)  Engage our shareholders: We have an engaged and active shareholder base. We want to build upon this by ensuring we provide a platform to give you a voice and to have your questions answered.

Please keep checking our Investors Relations page on www.algwplc.com for updates on these 5 pillars.

Chairman's statement

Gobind Sahney, Executive Chairman, stated "We have been progressing the 2B strategy internally over the last 12 months and are making great progress against our objective of managing over $2bn of AUM by 2025 in both the fund and insurance segments of the business.

We are very pleased with the foundational work we have brought to PLAC since the acquisition and it is now well positioned to build its AUM organically, whilst also supporting our buy strategy. Interest in the BlackOak Alpha Growth Fund is at an all-time high, driven by recent world events and investors looking for an asset class which is not impacted by the volatility of stock markets."

Gobind continued, "2022 will be yet another transformative year for Alpha Growth and we expect our fund and insurance business to grow substantially. I look forward to keeping our shareholders up-to-date on progress and will provide a further update before the end of Q1."

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

Alpha Growth Plc	[phone]
Gobind Sahney, Executive Chairman	[e-mail]
BlackOak Alpha Growth Funds	[phone] www.boagf.com
Arden Partners plc	[phone]
Ruari McGirr / Alexandra Campbell-Harris (Corporate Finance)
UK Investor Relations - Mark Treharne	[e-mail]

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.

About BlackOak Alpha Growth Fund

The Fund was established by two highly experienced longevity asset management companies.  The Fund invests in life settlements, is a Cayman LP with a tax efficient Master/Feeder structure in an open-ended format with quarterly redemptions.   The Fund seeks to provide well-diversified, non-correlated returns. The   Fund aims to achieve this objective through the acquisition of secondary and tertiary Life Settlement policies that will be structured and purchased to mitigate longevity risk and other investment and business risks and where the Company's expertise can add value.

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