Consolidation in life settlements management, as Abacus Life acquires Carlisle

Abacus Life, a life settlements buyer, market maker and alternative asset manager, has announced the acquisition of Carlisle Management, a Luxembourg-based investment manager in the life settlement space, for around $200 million.

The acquisition boosts Abacus Life’s scale, with Carlisle Management having had $2 billion in assets under management.

The company said the move is firmly aligned with its goal to expand as a global asset manager, specialising in life insurance-linked investments.

Abacus Life also said the acquisition will enhance its offering to institutional investors that are seeking attractive risk-adjusted returns with low correlation to other asset classes.

Carlisle Management has been active as an asset manager in the life settlements sector since 2008, so is a very well-known name in life insurance-linked investing.

“We are excited to be joining the industry-leading team at Abacus. The transaction will provide a myriad of potential opportunities and synergies that will be available to our funds, shareholders, and our employees,” explained Carlisle Management’s Chief Executive Officer Jose Garcia. “Our company cultures are a perfect fit, and our portfolios, operations and management systems are clearly complementary. As we move forward, our primary focus remains to provide the highest standard of service and exceptional value to our clients.”

“The acquisition of Carlisle is a strategic move aligned perfectly with our commitment to client-centric solutions and our continued growth as a global alternative asset manager,” added Abacus Life CEO Jay Jackson. “Carlisle has the strongest and most enduring track record as a fund manager within the life settlement industry, and its geographically diverse client base will further accelerate our drive towards becoming a global financial player.”

Elena Plesco, Chief Capital Officer of Abacus Life, also said, “This acquisition represents a pivotal moment for our ABL Wealth division, which provides investors with access to an uncorrelated, high-returning asset class of insurance products. By integrating Carlisle’s expertise and robust portfolio into our offerings, we are strategically positioning ABL Wealth at the cornerstone of our mission to provide sophisticated investment solutions for the life settlement market. The acquisition underscores our commitment to delivering unparalleled value and expanding our capabilities to serve a broader spectrum of investors.”

Consolidation in a niche asset class such as life settlements is not surprising and as players gain scale there is a likelihood it results in more institutional attention, to drive new flows to the space.

Carlisle shareholders are set to receive consideration for the acquisition amounting to $73.5 million in par value of Abacus bonds and 9.3 million in Abacus common stock.

Abacus has purchased life insurance policies with over $5 billion in face value. Now adding an established life insurance-linked investment manager arm, the company will expand its offering and be able to leverage its own sourcing capabilities to boost its asset management activity.

Abacus Life also pre-announced its results, saying it expects total revenue of between $28 and $30 million for Q2 2024, which would represent growth of 146-163% year-over-year, resulting in adjusted EBITDA of $15 to $17 million.

“We are thrilled to deliver another strong quarter of growth and profitability as we remain well on track to achieve all of our goals for 2024,” Jay Jackson, Chief Executive Officer of Abacus explained. “Our momentum continues to accelerate as we execute on our key strategies to drive long-term growth. During the quarter, we successfully completed a public offering that generated over $90 million of net proceeds, which will be instrumental in pursuing growth opportunities. Additionally, we established a new national distribution relationship with AIMCOR in which Abacus will offer its expertise and become a preferred partner for life settlement solutions to AIMCOR and its affiliates. Along with today’s earlier announcement of our agreement to acquire Carlisle Management Company SCA, these achievements underscore the strength and resilience of our business model and our commitment to delivering value to our shareholders.”