Alpha Growth Share Discussion Threads

[jungmana] 23/12/2019 17:01

I think Mick will be pushed out soon. The Mtr guys are working hard

[hoper1] 23/12/2019 16:57

Hopefully at least this one will be a winner. Well done on Thor. You and Mick B must be the only ones to make money out of that one!

[hoper1] 23/12/2019 16:55

Kefi was another! Think I bailed out at 9p years ago and watched it drop ever since...

[jungmana] 23/12/2019 16:21

Very lucky indeed. I took a bet there at about 0.28p average

[hoper1] 23/12/2019 16:13

Your lucky... Thor was always jam tomorrow when I knew it!

[jungmana] 23/12/2019 16:10

I added some today. Profits from Thor mining

[2mex] 22/12/2019 16:10

Exactly Jungmana, since 2nd December, approx. 360million shares have been traded equivalent to the whole of the company's shares almost twice over.

[jungmana] 22/12/2019 16:00

The entire dilution recently was just about 34m shares ( roughly 20% dilution). Not a lot and Look at the huge volume traded since the 2nd December.

[pretax2] 22/12/2019 15:50

There’s been a shed load of dilution recently, so plenty of profit making sells to come. Hope the company don’t take the share holders for granted.

[tim000] 22/12/2019 14:28

Yes, a good point that returns are uncorrelated, that’s important. Something I didn’t address was the cost of the facility. Also doesn’t this result in 100% leverage? That’s unusual!

[2mex] 22/12/2019 14:23

tim, thanks for that appraisal. It is worth considering this asset class. You mentioned it was like another hedge fund. Well, yes there is hedging which is guided by expert actuarial analysis but it is not a correlated hedge fund. It is not affected by the general markets and that is the difference.

As you mentioned, it does have unique skill in that the best and most knowledgeable people for each aspect of the business have been amalgamated into Alpha.

In terms of future competition, for example, Danny Swick is one of the best if not the top market maker in life settlement. These people are already from this space and have thrived in this market.

I have to disagree on the $100million credit facility. I believe it will have a massive impact.

atb

[tim000] 22/12/2019 13:25

2mex, I don't know if you ever came across a listed hedge fund called RAB Capital? It didn't have the unique skill set of ALGW, but nonetheless there are some similarities between the two businesses. RAB started off like a rocket, but ultimately the share price fell back and the business went private, because the fee structure was too aggressive and money started being pulled out into other hedge funds etc - as you'll know, money management is a highly competitive industry and investors don't like paying massive fees in a low-yield environment. I don't envisage that scenario happening here, because returns should be consistent and healthy. However, ultimately ALGW is just another fund manager like RAB, and it shouldn't trade on enormous multiples of earnings (perhaps 10-15?). $200 mn FUM from clients can be expected to yield about $5 mn gross income (assuming 12% can be achieved consistently, which isn't a given), so perhaps £1 mn profit? Hence maybe a mkt cap of £10-15 mn? But bear in mind, in the longer term, the industry will expand and new competitors will emerge almost certainly, bearing down on ALGW's fees. Imo, the key to ALGW's success will be how quickly can it achieve market dominance by growing into a multi-billion fund? That would give the firm some protection from newcomers. I don't know anything about this market, and have no idea whether HNWIs etc will place substantial funds with a new fund manager of this type. So I think ALGW is somewhat speculative at the moment, admittedly with much greater upside than downside. But unless the firm can attract an avalanche of funds quickly, I wouldn't expect the share price to rise enormously overnight. And the $100 mn facility is already known about (if not finalised), so I wouldn't expect it alone to have a massive impact. Anyway, those are my thoughts.

[2mex] 22/12/2019 12:03

"..What is unique about this is: being an asset manager our overhead is minimal - it doesn't take a lot to run it.."

We are awaiting the near-term news of $100million credit facility, the staff structure looks very strong and there is a 10 year increase in baby boomers coming through to feed the market.

tim, taking midpoint of 12%, what would you suggest as a value for the company for FUM of $200million?

I agree managing billions will not come overnight. The other side to that is the potential, experience and capability present to manage billions in the years ahead.

[tim000] 22/12/2019 11:19

I’m monitoring this company but have yet to invest. I imagine the Annual Results will be published Monday or Tuesday, which will provide further information on operational costs etc. This is effectively a hedge fund, with a hedge fund fee structure and no doubt hedge fund type staff remuneration. If their funds return 12%, the midpoint of the targeted range, fees are $2.5 mn per $100 mn invested. Staff remuneration might be half of that. Then there are the overhead costs of a listed business. So the company really needs to be managing billions, as all hedge funds do, if it is going to achieve the kind of returns and share price being talked of here. That may well happen given the unique skills of the company, but it won’t happen overnight. Indeed, after about two years as a listed company, FUM are currently tiny.

[2mex] 22/12/2019 11:05

Danny Swick, COO presentation 03 May 2019


"..If an individual owns a life policy and they decide they no longer want it, they have the option to sell it..and that's what we do: we purchase those policies.."


"..So the way it works, just as an example, is we would gather all the medical records on that individual and send them out to an actuary (Alpha now own Colva so it is also in-house) and that actuary will help us determine that individual's life expectancy and that gives us an idea of what the policy is worth.."

"..So, for example, let's say there is a $1million life insurance policy and we run it through our model and we determine that the policy is worth $200K then, in this example, we would pay that individual who owns the policy $200K. We would project our premium stream for the next 8 years. So the estimate for that is approximately $240K and when that individual passes away then we collect the $1million death benefit. So our gross profit on that is $560K.."


"..This is completely regulated in the US. 90% of all states have their own specific regulation. In fact, in 6 states in the US, if somebody owns a life insurance policy and they decide they no longer want it, the life insurance company is responsible to let that individual know that if they are just going to let that policy go away or let the policy lapse that they do have the option to sell it in the secondary market...and when did this all start? Well, believe it or not, in 1911 there was a ruling in the states that if somebody owned a life insurance policy, it is a transferrable asset just like art, real estate..so they do have the right to sell it.."


"..So if we are looking at the insurance industry as a whole there is over $19Trillion currently of life insurance written in the US which represent 144 million life insurance policies.."

"..approximately $57Billion every single year lapses and those are the policies we are interested in. So if you look at the $57Billion that lapses about $2.8Billion is settled: sold into the secondary market to people like us.."

[hamidahamida] 22/12/2019 10:41

Just workout the total annual fees on 100million which is just the start......Black oak alpha growth Fund is an open-ended Cayman Island Exempt Limited Partnership investing in Life Settlements and is available to qualified global investors. Requiring a minimum investment of $250,000, the Fund has a target return between 10% and 14%, and provides investors with liquidity through quarterly redemption windows. The Fund has a management fee of 1.5% per annum and a [annual] performance fee calculated as 20% of all returns in excess of the hurdle rate of 7%.

[lr4850] 21/12/2019 22:42

Good on you to spread the info.

[aimshares] 21/12/2019 21:44

Yes it is ,just saw it on there

[lr4850] 21/12/2019 21:42

AimShares

It would be courteous to acknowledge that your info is from LSE board. ?

[aimshares] 21/12/2019 21:40

New Website https://algwplc.comPassword is alphagrowth

[aimshares] 21/12/2019 21:11

The website is now password protected,you had access for a short while ,now it looks like it's only access is for the big boys .