Abacus Life, a publicly traded alternative asset manager and originator 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 from TrimTabs Asset Management in 2022, has five ETFs, three index strategies and separately managed accounts that use free cash flow as the primary selection criteria for stock selection.
Dynasty Investment Bank served as FCF’s exclusive advisor on the deal, which is expected to close in the fourth quarter.
This is Abacus Life’s second asset management acquisition in a matter of 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’s wealth division, ABL Wealth, and will provide investment strategies to advisers who ultimately join the platform.
Abacus Life launched ABL Wealth late last year with backing from Dynasty Financial Partners. The company plans to expand that offering by acquiring and aggregating RIAs under the ABL Wealth brand. It will provide those advisors with leads both from the inquiries the company receives and from cash payouts from its life settlements business.
Abacus Life CEO Jay Jackson said the company has a strong pipeline of potential RIA acquisitions but wants to get the investment management part right first. The FCF acquisition is the next step in building a longevity and lifetime-based financial planning model.
“Free cash flow is a profitable business, and when we develop models based on life and longevity, we want to be able to invest in companies that are profitable,” he said. “We know that over the long term, not only have they historically outperformed the market, but they also tend to have lower volatility.”
Jackson will focus on the company’s RIA acquisition strategy in the second half of this year.
“Our idea was to develop the models, bring out this program and develop the idea of using lifespan as part of financial and estate planning. At the same time, we worked with investment advisors across the country, talking to them and finding potential clients who would like to join this platform.”
Consultants with an insurance background are particularly attractive, he said.
“The core of what Abacus does is insurance management, in the sense that we use actuarial data and life expectancy data to purchase life insurance policies,” he said. “Having financial advisors who are well versed in life insurance is really beneficial to us as a company and very profitable because they may already be selling life insurance products or be able to identify opportunities for potential purchase.”
Abacus Life receives approximately 10,000 inquiries each month from people who may not be eligible to sell their policy but need other financial services. These prospects are, on average, over 55 years old and have a net worth of $1 million, and serve as a differentiator for the company when attracting RIAs.
“Financial advisors often consider selling their business to a rollup strategy and are then more or less left to fend for themselves,” Jackson said. “They are not given any additional resources to really grow their business, yet we receive thousands of inquiries every month asking if we can help them grow their business in line with what we are trying to accomplish with our own wealth management funds.”
