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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.
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?
Reply from King Suarez can be seen over on ADVFN.
To give you an idea of how important the larger BOAG fund could be with regards to additional investment by existing investors consider this:
The original seed investment arranged by SLIM was $10 million.
During 2020 an additional $10 million of investment was made. Let us assume that these investors limit their investment to no more than 10% of the total invested in a fund so we would be looking at 10 investors each investing $1 million.
IF the counterparty invests a further $100 million then each of the 10 investors from 2020 can increase their investment in BOAGF by an additional $10 million. I'm not saying that they would all put in the maximum but that's a potential further $100 million. The investors who invested $5.5 million in Q1 of 2021 might also be able and willing to boost their investment now that the total fund is $100 - 200 million. The total could quickly get to $250 million. That is a non-correlated fund, the size of which would surely become of serious interest to yet another swathe of II's and family offices and so the success of BOAGF would go from strength to strength.
Yes that is my understanding of those parts of the RNS.
We have known for some time that the counterparty to the RCF is considering direct investment but this is the first time GS has quantified what level of investment this might be. It could be $100 million.
In addition to to a larger fund size being of interest to more institutional investors and family offices, the existing investors in BOAGF are likely to increase their investment as most have 'rules' limiting their maximum percentage investment in a particular fund.
Of course it is not yet a done deal and all 100 life settlement policies may not pass whatever requirements the counterparty has but, if it does get signed off, ALGW will be boosted to a new level.
I believe that today's close is the highest ever, happy days :)
My last post was badly worded. The warrants only have to be paid for EITHER when the holder wants to sell or by the latest in March 2023 when they expire.
@Bots: GS can't know when ALGW will get the warrant money as the warrant holders don't have to stump up the cash until they want to sell, which, if they have any sense, will probably be at the last possible moment which is 2 years after they were issued so about March 2023.
@HighFive:
Additional acquisitions: Yes this is what GS told me during my 'insider time'. These acquisitions are being 'picked up and run with' from what Northstar had 'in the pipeline'. The cash available for these acquisitions will be the $2million that is in Northstar's bank accounts so there will not need to be a further share placing by ALGW.
Prospectus: The prospectus regarding the placing of shares to buy Northstar has not yet been published and it seems that it is taking a while to audit Northstar's accounts because, as a private company, they haven't needed to have the sort of in depth audit that is now required as part of a FTSE listed company.
Additional colour: LOL, don't imagine that I usually have any more info. than you guys do. I did briefly while I was 'an insider' during the raising of funds for the share placing but GS doesn't tell me anything that he shouldn't.
BOAGF: An additional $5million is great though with the several huge Asset Management collapses recently I continue to be amazed that 'Family offices' aren't beating down GS's door to invest in a fund that is NOT CORRELATED to the stock market. I guess he and the team need to work on getting the message out which is, presumably, what Michael Molloy's appointment is for.
Same for iDealing on quote to buy: "unable to get a quote from market makers at this time"
Quote to sell: 4.2500
My post was in effect a PM.
Marcus :)
Doubt there will be much movement without news.
Twitter, telegram etc. = avoid like the plague.
ADVFN = Okish but there are some very obvious rampers/derampers.
Here = OK, most are reasonably well informed.
ALGW's web site = The only source of information that you can rely on. Go to the 'investor relations' and start reading 'all' from the very beginning. Bear ion mind that the direction of the Company has changed since the very early days and that GS has a tendency to over promise and under deliver though he certainly pulled a proverbial rabbit from the hat with the buy out of the Bermuda based Insurance Company.
Where are you looking to see the bid/ask? If it's up above this then use it as a VERY rough guide. As of 11.41 the quote from a broker was 3.5250 / 3.7990 which is about a 7.8% spread. This is not bad for a stock that's as illiquid as ALGW as the MMs are not about to take any risks, they just want to make a turn on every trade.
LOL, 3.912 :)
Both iDealing and iWeb happy to quote 3.192 to buy 100k shares.
I think only to those who were invited to subscribe.
I posted the main points on 11th Feb.
GS told me that the reason that Mr Gray has sold 95% of his company to ALGW is that he was required to do so in order to take up a senior position with either Blackrock or Blackstone, I sorry but I don't remember which it was that GS said.
@steve205: RRL, that was an expensive lesson for me too.