Alpha Growth PLC (LSE:ALGW, OTCQB:ALPGF) said that it will concentrate its focus on two segments, fund management and insurance, after its Bermuda subsidiary agreed to acquire a Guernsey-based life insurance company in a deal that will more than double group assets under management (AUM) above US$700mln.
The acquisition, which is valued at roughly US$3.3mln, is of all the operations of a Category 1, international life insurer with approximately 3,785 long-term life insurance contracts in force at the end of 2021, with assets under management of approximately US$370mln.
Executive chairman Gobind Sahney said: “This acquisition is another key building block in our plan to be managing over US$2bn of assets by 2025 and I'm very pleased to announce that we are currently tracking ahead of schedule to achieve that aim.
“This acquisition not only increases our AUM substantially, it also provides us with the ability to offer very tax efficient insurance based wealth management products and will also serve as a European vehicle for further value accretive acquisitions."
The acquisition, which is being funded from current resources and so will not require an equity raise, is subject to the approval of the relevant regulatory authorities and is expected to be completed in the summer.
The company's focus for 2022 will be to “aggressively expand both the fund and insurance segments”, Alpha Growth said, a decision that was based on the prospects of both businesses and “allows the company to direct its resources and human capital efficiently to ensure that maximum growth and shareholder returns are achieved”.
As a result, the company said it will stop discussions with counterparties in regards to separate managed accounts, revolving credit facilities and other esoteric activities to build AUM.
“Whilst these activities would have increased AUM, the company has other prospects which provide better returns and which require less overhead,” it said.
The BlackOak Alpha Growth Fund has grown to over US$50mln from US$10mln in 2020 and once the acquisition is completed the insurance segment will have grown from zero to over US$650mln, the company said, with the Providence Life Assurance Company subsidiary recently issuing its first policy since it became part of the group.