Abacus Global Management has completed a securitisation worth more than $400 million, representing the largest transaction of its kind completed by the company to date.
The transaction is structured across two tranches and is collateralised by a diversified portfolio of life insurance policies. The overall structure includes Class A and Class B notes, together with a residual interest, while the notes received an investment-grade rating from a third-party rating agency.
The transaction attracted strong demand from institutional fixed-income investors, highlighting the increasing role of longevity-based assets within the alternative investment and structured finance markets.
Under the transaction, a special-purpose vehicle issued investment-grade notes backed by the underlying pool of life insurance policies. Abacus will continue to service the policies through its affiliates.
The structure therefore allows the company to connect assets originated and underwritten through its platform with institutional capital markets while retaining an ongoing role in their servicing.
Abacus operates an integrated model covering the origination, underwriting and servicing of longevity-based assets, an approach that enables the company to manage different stages of the investment lifecycle before transferring exposure into institutional investment structures.
According to the company, the net proceeds from the securitisation will be used to support further policy originations as well as general corporate purposes.
Beyond the funding generated by the transaction, the securitisation plays a broader role in Abacus’ business model.
By transferring portfolios of life insurance policies into structures accessible to institutional fixed-income investors, the company aims to increase its assets under management while recycling capital into new originations.
The strategy is also intended to increase the contribution of recurring, fee-related earnings, reducing the relative weight of revenues generated through individual transactional gains.
“This is a platform strategy, not a financing strategy,” said Elena Plesco, Chief Investment Officer of Abacus, commenting on the transaction.
The model allows Abacus to broaden its institutional investor base and expand the distribution channels available to its asset management business, while continuing to generate servicing and management revenues from the underlying assets.
The size and structure of the transaction also point to the increasing institutionalisation of longevity-based assets.
According to Abacus, demand from institutional investors was strong, while the investment-grade rating broadens the potential investor base for securitised exposure to this type of asset.
“This is the largest securitisation to date for Abacus,” said Jay Jackson, Chairman and CEO of Abacus, highlighting both the investment-grade rating and the level of institutional demand for the transaction.
For the company, securitisation is therefore becoming a channel not only for accessing capital but also for expanding the scale of its asset management operations.
By combining origination, underwriting and servicing capabilities with access to institutional fixed-income markets, Abacus is seeking to create a repeatable model in which capital can be recycled into new policies while assets under management and recurring revenues continue to grow.
The transaction represents a significant expansion of Abacus’ securitisation activity and reinforces the role of structured finance within its growth strategy.
The notes were offered and sold in the United States through a private placement to accredited investors under Section 4(a)(2) of the Securities Act of 1933 and were not registered under the Securities Act or state securities laws.
With a total structure exceeding $400 million, the deal demonstrates how securitisation can provide alternative asset managers with a mechanism to combine balance-sheet recycling, institutional funding and the development of recurring asset management revenues.
For the broader structured finance market, the transaction also provides a further example of the growing use of securitisation technologies beyond traditional credit portfolios, extending them to alternative assets such as life insurance policies and other longevity-linked investments.
