The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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cheers Rambo....looking the real deal here at last!
Bamb - I think the 100 mkt cap is easily achievable and would now be much larger given the recent progress. You would only need circa 5m in revenue to get there and lets assume a flat fee of 1% (no performance upside included) this could roughly be 500m AUM. Given we are on 300m now pre RCF contribution which might add another 100m AUM it really shouldn't be difficult to smash way beyond this. The real money will be made away from the BOAGF until it gets much larger and we split that anyway. I think RCF would be an SMA (more fees revenue for us) and not into the fund but we will have to wait and see. I wouldn't sell any for 10p as this is just getting started.
Great summary .. hope you don't mind I have shared elsewhere
Hi bots,
I agree with what you say, GS did once say in an interview when talking about the loan provider-"all I will say is stand back"
Obviously the direction has now changed over the last two years and we seem to have used a scatter gun effect to get some sort of business but I would like to see more of the single managed accounts taken up rather than the business provided by takeovers and mergers.
Hey Ho though, it all counts.
I agree raaydaar,
GS has started to talk about Alpha as a buy or build organisation; a big change in tone. The BoD are building and Empire - After all, who doesn’t want 10% return on their wealth? ...Especially when US treasuries are yielding less than 1% and with the broader market looking so frothy. Step forwards Michael Malloy, the newly appointed specialist marketing director. Meanwhile I suggest everyone else step back, Alpha could really take off very quickly.
Sell at 10p if you like (we could be there sooner than you think) but this will be worth much more to patient holders and it’s nice to be in near the start.
I would turn down a 10p offer on any day. Company direction has changed significantlynsjnce DS original target of $100 million. Company is potentially worth significantly more (I'm talking multiples even fully diluted) than that
@bamb: Yes, the $100 million Market Cap target is from years back but Rule #1 when you start a company/venture is to have an exit strategy. I understood the $100 million market cap to be where GS/DS thought ALGW would be interesting as a buy-out target for one of the American Asset management behemoths. Again, Yes, ALGW is different / has evolved from GS's original vision and it could easily be grown into a company with a Market cap of $200 million but if $100 million is the preferred size of a potential takeover target in this industry then we won't be the ones deciding when ALGW gets bought out. Let's face it, I doubt there would be many who would turn down an offer of 10p on Monday :)
Some great posts thanks guys. Interest at a high, like the sp..
How recent is that 100 mn target? I know swick set a 100mn target but that was back in 2018. Alpha is a different animal now and personally expect something more ambitious than 100mn.
Thanks for sharing your thoughts.
It's exciting that all those SP outcomes seem absolutely achievable with the ALGW business model and strategy. I'd be pleased to hit either 10p or 20p but I'm even more excited to see where ALGW goes in the 5 year timespan. The potential is fantastic IMHO.
Similar Asset management companies to ALGW, and bear in mind that afaik no one has quite the same mix of licences and funds, trade on 29x P/E but these are established and don't increase their AUM dramatically year on year.
£1.5 million x 29 / 428.3 million shares = 10p/share. BUT the SP is a reflection of what the future earnings might be so might the future AUM and earnings be double? Then the SP should be 20p. GS has stated that his target (by this does he mean exit strategy?) is to get ALGW to a Market Cap of $100 million which is currently 17p/share (or 23p in the unlikely event that he meant £100 million). Remember also that the shares in issue will increase by 187.5 million between now and March 2023 when warrants are taken up so the SP needed for ALGW to have a Market Cap of $100 million would then only be 12p/share.
Very interesting analysis, thank you.
Having read that, the question that comes to my mind then is what would be a fair market cap for £1.5m PA profit?
You may not have seen the documentation that accompanied the Share placing Prospectus but Northstar’s Proforma net profit after tax was stated as $487k which equates to about £355k.
The fees that will be earned, over the next 12 months, on the current $25.5 million AUM, assuming a 10% return on the fund, come to £195k.
So the ALGW Group’s projected annual income on today’s joint AUM is £550k.
Northstar’s Operating Expenses are paid for in the £355k net figure above.
ALGW’s 2020’s Operating Expenses were £567.2k including £247k of Directors Fees, £12k of which was made to departing Directors, so call it £555k.
I think we can say that, as of now, ALGW is, more or less, breaking even.
So for the future:
Michael Molloy has joined and will presumably be paid about £100k which will only need about an additional $14.5 million of AUM to recover that in fees.
IF the RCF Counterparty directly invests $100 million in BOAGF that would generate an additional $1,050k or £765k in fees which goes straight to the ‘bottom line’.
Likewise whatever the existing BOAGF investors increase their investments by, and this could be another $100 million, will also generate fees that go straight to the ‘bottom line’.
In addition there is a good possibility that clients of Northstar, who have $270 million AUM, will see the benefits of also investing in one of ALGW’s funds or SPVs.
It is worth noting that any AUM in the G&I fund or SPVs will generate up to x2 the fees as they do not need to be shared with SLIM.
At some point between now and March 2023, holders of the 170 million warrants (net of Pello’s) will want to pay for them, and this will give ALGW a further £5 million of Share Capital on top of the ‘extra’ £200k raised recently.
All in all I think the ALGW Group could well be showing net profits in excess of £1.5 million per annum in a year’s time.
Will GS complete any of the acquisitions that Northstar’s had lined up and thereby increase the Groups AUM even further?