How it works14 Feb 2020 21:11
I am at a loss with the theory and propaganda on here and on Twitter about a prospective Joint Venture (JV) between Alpha Growth plc (ALGW) with the asset manager who might be funding a revolving credit facility (RCF). It simply flies in the face of public evidence, including submissions to the Securities and Exchange Commission (SEC) in USA.
ALGW has a formal joint venture with SL Investment Management Ltd (SLIM) based in Chester, UK. It was announced in an RNS on 21 Nov 2018. ALGW holds all the intellectual capital through key players, ideas, marketing skill and networks in USA. SLIM has a decade of administrative experience in the senior life sector and the auditable data on investment return from its own Black Oak Growth Fund. They are perfect partners.
Together they have launched a more tax efficient fund called Black Oak Alpha Growth Fund (BOAGF) as a limited partnership based in the Cayman Islands aimed at tax savvy US investors. The authorised regulated investment managers for BOAGF are SLIM and an acquired subsidiary of ALGW, called Alpha Longevity Management Ltd (ALM), based in British Virgin Islands. The general partner of this fund is called BOAGF GP LLC based in the Cayman Islands, managed jointly by SLIM and ALM, with four named officers as managers of the general partner = Swick, Sahney, McAdams and Taylor.
The structure of the fund was further explained on 2nd December by the pursuit of an SPV warehousing facility which will aggregate SLS assets for BOAGF to sell as securitized investments. The ALGW prospectus suggested the SPV would be in Ireland. As it says “ The Company is also aware through its corporate finance contacts of groups of Institutional investors who want to obtain an exposure to the SLS Asset class as a means of asset diversification but which may not have the financial ability or the desire to buy and manage entire portfolios. These corporate finance houses are proposing to establish SPVs (likely to be established in Ireland)”
The RCF will be available to the SPV (not to ALGW) and the SPV will be operated by the corporate finance house(s) as explained above. Whether the $100 million RCF is being provided by JP Morgan, Blackstone, M&G or maybe all of them is neither here nor there, they will run them and upload the SLS packages to BOAGF as collateral for bond sales, for a fee.
BOAGF LP LLC will act as the asset manager after the acquisition of the SLS Assets, receiving a fee for its services (which splits upwards equally to ALGW and SLIM as income).
The fund will issue bonds to US investors that are likely to have a zero coupon and a high redemption value so giving the high (16%) rate of return which in turn delivers high fee income.
In short the RCF funder will be running the SPV and taking the lion’s share of the investment opportunity for its own US clients, whether that is Blackstone, JP Morgan, M&G or anyone else.
That is the public descriptions of how it works. No JV with the RCF fund
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