Abacus Global Management Launches Asset-Based Finance Strategy

Introduction to Abacus's New Strategy

Abacus Global Management, Inc. (NYSE: ABX), a leading figure in the alternative asset management sector, has officially unveiled its latest asset-based finance (ABF) strategy. This initiative is spearheaded by seasoned professionals Monty Cook and Elena Plesco, who have extensive backgrounds in asset-based finance from Varde Partners and KKR, respectively.

The newly formed ABF strategy aims to capitalize on a market exceeding $20 trillion while integrating institutional origination with Abacus's proprietary insurance analytics and sector-specific relationships.

Leadership Behind the ABF Strategy

Monty Cook, now Head of Private Credit at Abacus, previously led the North American asset-based finance division at Varde Partners. Cook has a robust track record in investing and managing diversified portfolios focused on asset-based finance.

Elena Plesco, Abacus's Chief Capital Officer, brings nearly a decade of experience from KKR, where she co-headed specialty finance investments. Together, Cook and Plesco have collaborated for over a decade, working on various transactions that highlight their combined expertise in the field.

ABF Strategy Objectives and Investment Approach

The ABF strategy is designed to deploy capital towards asset-backed investments, emphasizing the generation of returns that include both current income and capital appreciation. Key characteristics of this strategy are:

• Stable Cash Flows: Focus on reliable income streams derived from asset-backed investments.
• Low Volatility: Investments are structured to minimize overall market risk.
• Low Correlation: The strategy aims for lower correlation with traditional market fluctuations.

Abacus's investment portfolio will encompass a diverse array of asset classes, including consumer credit, equipment finance, receivables, and more.

Strategic Importance of the ABF Launch

This strategic move enhances Abacus's broader goal of creating a diversified alternative asset management platform equipped to generate multiple streams of fee-related earnings. With the asset-based finance market generating significant institutional demand for predictable cash flows, this initiative solidifies Abacus's commitment to fulfilling that demand.

Jay Jackson, Chairman and CEO of Abacus, noted, "This strategy is a natural evolution of our platform, applying our successful methodologies to an adjacent market with substantial unmet demand."

Expected Returns and Structural Protections

The ABF strategy seeks net risk-adjusted returns of 11–13%, including capital appreciation, with an anticipated average investment duration of three to five years. Key elements of the investment approach encompass:

• Institutional Origination Network: Access to proprietary deal flow enhances sourcing and pricing capabilities.
• Specialized Underwriting: Employs rigorous credit discipline, integrating institutional ABF methodology with analytics.
• Insurance and Actuarial Expertise: Leveraging over 20 years of insurance acumen to assess opportunities.
• Downside Protection: Targeting approximately 65% of investments in holdings with investment grade-like characteristics.

Conclusion

The launch of the ABF strategy positions Abacus (NYSE: ABX) as a formidable player in the asset-based finance sector. This approach not only aims to enhance returns for institutional investors but also establishes a robust infrastructure that caters to the evolving needs of asset-backed investment opportunities.

As the market continues to demand innovative financing solutions, Abacus's expertise in insurance analytics and asset management will be pivotal in capturing these opportunities.