RE: Questions for New Year1 Jan 2021 20:54
OK, everything is shut and there is nothing to do, so I will offer an answer.
Alpha Growth PLC (ALGW) itself does not need a revolving credit facility (RCF), because it is a management consultancy not a “Fund”. It makes money from management fees.
The managed Fund is the Black Oak Alpha Growth Fund (BOAGF) launched in April 2019, managed jointly with SL Investment Management Ltd (SLIM) of Chester, and it is based in the Cayman Islands for tax reasons. It does need RCF and urgently.
The Fund was launched with $15 million of seed working capital, presumably facilitated by SLIM but no one ever said where the money came from. That working capital has been used to acquire assets under management (AUM) of $20 million as at October 2020. The process is to buy life policy settlements in USA, package them together as securitised investment bundles and sell them on to investors at a minimum $250,000 a pop and repay the provider of working capital. So over 18 months the Fund has sold around 4 bundles a month at most, on average, with that level of working capital.
To scale up to AUM of $100 million, as aspired, it will take 7 years with only $15 million of working capital. So the whole idea of the $100 million RCF was to accelerate things to be able to do it within a year or two.
If the RCF is not forthcoming, then ALGW is just reduced to a management consultancy without a Fund of critical mass. Cue the new “separate managed accounts ” and “income and growth“ consultancy strategies.
RCF was supposed to be in the bag a year ago before the word COVID was invented, and GS and team were in London to sign it off, but it never happened because of COVID apparently.
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