Abacus Life, a publicly traded alternative asset creator and manager specializing in life insurance products, has signed an agreement to acquire FCF Advisors, a New York-based asset manager with approximately $600 million in assets under management.
FCF, which was renamed by TrimTabs Asset Management in 2022has five ETFs, three index strategies and separately managed accounts that use free cash flow as the primary screening criteria for stock selection.
Dynasty Investment Bank was the exclusive advisor to FCF on the deal, which is expected to close in the fourth quarter.
This represents Abacus Life's second asset management acquisition in as many months. last month, the company announced plans to acquire Carlisle Management Company SCA, a Luxembourg-based alternative asset manager with approximately $2 billion in assets under management, for $200 million.
Both FCF and Carlisle will be part of Abacus Life Asset SharingABL Wealth, and will offer investment strategies to advisors who eventually join the platform.
Abacus Life launched ABL Wealth late last year with the backing of Dynasty Financial Partners. signature plans to seed that bid acquiring and aggregating RIAs under the ABL Wealth brand. It will provide those advisers with guidance from both the inquiries the company receives and cash payments from its life settlement business.
Abacus Life CEO Jay Jackson said the firm has a strong pipeline of potential RIA acquisitions, but it wanted to get the investment management part in place first. Buying FCF was the next step towards building a financial planning model based on longevity and longevity.
“Free cash flow is profitable business, and if we're building models based on longevity/longevity, you want to be able to invest in companies that are profitable,” he said. “We know that long-term, not only have they historically outperformed the market, but they typically offer lower volatility.”
Jackson will focus on the firm's RIA acquisition strategy in the latter part of this year.
“Our idea was, let's build the models, let's get this program out and this idea behind using longevity as part of your financial planning and estate planning, and at the same time we've been working, talking and looking for investment advisors in the entire country that would like to join this platform.”
Experienced insurance advisers are particularly attractive, he said.
“The core engine of what Abacus does is insurance management, in the sense that we use actuarial and life expectancy data to underwrite life insurance policies,” he said. “Having financial advisors who have a keen understanding of life insurance is really beneficial to us as a company and really accretive because they can already sell life insurance products or be able to identify opportunities for us to potentially receive.”
Abacus Life receives approximately 10,000 inquiries per month from individuals who may not qualify to sell their policy but have other financial service needs. These leads are, on average, over the age of 55 and have a net worth of $1 million and serve as a differentiator for the company as it looks to attract RIAs.
“A lot of times, financial advisors may consider selling their business in an aggregation strategy, and they're kind of on their own,” Jackson said. “They're not given any additional resources to really grow their business, where we have thousands of requests every month that we can help them grow their business that fall in line with what we're looking to create within our funds of asset management. .