Gwg Holdings Inc
GWG Holdings, Inc. is a specialty finance company and a leading financial
purchaser of life insurance assets in the secondary market. We create opportunities
for consumers owning life insurance to obtain significant value for their policies
as compared to the traditional options offered by insurance companies. We also
create opportunities for investors to participate in alternative asset classes,
such as life insurance, not correlated to traditional financial markets.
Market researchers believe that the market opportunity in the life insurance
secondary market is significant, with the annual net market potential of $138
billion in face value of policy benefits in 2015. To seize this opportunity,
we have built a robust operational platform to offer consumers options based
on the market value of their life insurance that include: (i) selling the entire
policy benefit for cash, or (ii) selling a portion of the policy benefit and
retaining a portion of the benefit with no future premium obligation. When we
purchase a life insurance policy, we expect to continue paying the premiums
for that policy until the policy benefit is paid upon the mortality of the insured.
We believe we are well positioned to capitalize on the market opportunity to
serve consumers in the life insurance secondary market.
The life insurance secondary market provides buyers of life insurance policies
with the opportunity to purchase an alternative asset that potentially generates
attractive investment returns not correlated to traditional financial markets.
When a buyer acquires a life insurance asset in the secondary market, that buyer
acquires a financial obligation of an insurance carrier to pay the face value
of the insurance policy benefit. The potential yield generated from a portfolio
of life insurance assets equals the difference between the purchase price of
the life insurance assets, plus the premiums and financing costs to maintain
those assets, and the face value of the policy benefits received.
We seek to build a profitable and large portfolio of life insurance assets
that are well diversified in terms of insurance companies and insureds. We believe
that diversification is a key risk mitigation strategy to provide consistent
cash flows and reliable investment returns from our portfolio of life insurance
assets. To grow our portfolio and achieve the diversification we seek, we offer
investors the opportunity to participate in the yield potentially generated
by our portfolio of life insurance assets through a variety of financings and
securities offerings. We chose to finance our business in this manner after
the 2008 credit crisis, during which banks largely ceased financing alternative
asset classes as a result of the regulatory response to the financial crisis.
We believe we are well positioned to continue providing investors with yield
participation opportunities from alternative asset classes once dominated by
the banking sector.
Our business model is to earn a net profit between the yield generated by the
alternative assets we own and the costs we incur to originate and finance the
assets. We believe that we are uniquely positioned to acquire life insurance
assets directly from consumers needing our services, and to finance our portfolio’s
growth by providing investors with the opportunity to participate in the yield
we generate from our assets. At the same time, we seek to fill the vacuum created
by the widespread disappearance of bank-driven finance in a variety of other
alternative asset classes.
To participate and compete in these growing markets, we have spent and intend
to continue spending significant resources: (i) developing a robust operational
platform and systems for originating and purchasing life insurance policies
and other alternative assets; (ii) creating opportunities for investors to participate
in the yield generated by alternative assets we own; (iii) recruiting and developing
a professional management team; and (iv) establishing strategic relationships
for delivering the services we provide.