RE: Summary13 Jan 2020 11:49
Thanks to 2mex for this summary of key points!
Some key points to note:
1. Alpha has probably the top life settlements market maker, Danny Swick, with $8Billion of trading experience.
2. Alpha with SLIM has in-house actuarial expertise specific to life policies - a quality not found in usual settlement businesses
3. The above two points are validated in the progress towards $100million credit facility
4. Points 1&2 are inlet and processing. Austin King, with extensive connections has been brought in for the outlet; the sales.
5. KPMG has validated a 16.2% annualised return on this uncorrelated asset
6. "this uncorrelated asset": the asset class is not affected by general market
7. Alpha has structured a tax-efficient system which will bring in global investors
8. Black Oak fund has already received commitments for seed capital of $15 million
9. The market is absolutely massive at $19Trillion with $57Billion policies lapsing each year
10. Only $2.8Billion of policies are settled each year. The $57Billion lapsing is there to be taken.
11. The market will climb over the next 10years as baby boomers retire
12. Note the wave retiring is more tech-savvy, internet dependent: ideal for targeted marketing
13. Point 12 also means that social media / marketing will build life settlement awareness
14. Perhaps THE key point: Life settlement is a great option, far better than surrender or lapsing
15. The $100million credit facility can be used to buy $500m of face value and repeated 4x per year
16. Alpha has a unique situation with specific talents amalgamated for Life Settlement
17. Legislation is already present in 6 states to ensure life policy holders are made aware of the settlement option.
18. 2019 Annual report: "..For 2020, we expect to be generating material revenues and as 2019 closes, at the date of this report, the company has approximately £450,000 of cash balances, so the group is very well positioned as we move into this new phase.."
19. This is a scalable, low overhead business which has potential ahead to 10bag, 20bag etc.
20. Based on the projected targets Y1:FUM $100m, Y2:FUM $350m etc, the projected FUM after 8 years will be approaching $8 Billion
21. Potential for asset manager(s) to increase credit facility
22. The initial $100m trade target for year 1 indicates confidence of business developing quickly. After Y2, expected annual increment more than $250m
23. When asked about 3-5 year target/valuation: Danny Swick's reply "..Yes, I think the ultimate goal which I think about on a regular basis is where we get to a point where we have a market cap in excess of $100million.."