Abacus Life, a publicly traded alternative asset originator and manager that specializes in life insurance products, has signed an agreement to acquire FCF Advisors, a New York-based asset manager with about $600 million in assets under management.
FCF, which was rebranded from TrimTabs Asset Management in 2022, has five ETFs, three index strategies and separately managed accounts that use free cash flow as the key screening criteria for stock selection.
Dynasty Investment Bank was FCF’s exclusive advisor on the deal, which is expected to close in the fourth quarter.
This represents Abacus Life’s second asset management acquisition in as many months. Last month, the company announced plans to acquire Carlisle Management Company SCA, a Luxembourg-based alternative asset manager with about $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 the advisors who eventually join the platform.
Abacus Life launched ABL Wealth late last year with the support of Dynasty Financial Partners. The firm plans to seed that offering by acquiring and rolling up RIAs under the ABL Wealth brand. It will provide those advisors with leads from both the inquiries the company receives and cash payouts from its life settlements business.
Abacus Life CEO Jay Jackson said the firm has a strong pipeline of potential RIA acquisitions, but it wanted to get the investment management piece in place first. The acquisition of FCF was the next step toward building a longevity- and lifespan-based financial planning model.
“Free cash flow is profitable businesses, and if we’re building lifespan/longevity-based models, you want to be able to invest in companies that are profitable,” he said. “We know that long-term, not only have they historically outperformed the market, but they typically provide lower volatility.”
Jackson will focus on the firm’s RIA acquisition strategy in the latter part of this year.
“Our idea was, let’s get the models built, let’s get this program put out and this idea behind using lifespan as part of your financial planning and estate planning, and simultaneously we’ve been working with, speaking to and prospecting investment advisors all across the country who would want to join this platform.”
Advisors with insurance backgrounds are particularly appealing, he said.
“The core engine of what Abacus does is insurance management, in the sense that we use actuarial and longevity data to acquire life insurance policies,” he said. “Having financial advisors that have a keen understanding of life insurance is really beneficial to us as a company and really accretive because they might already be selling life insurance products or be able to identify opportunities for us to potentially acquire.”
Abacus Life receives some 10,000 inquiries a month from individuals who may not qualify to sell their policy but have other financial services needs. These leads are, on average, over age 55 and have $1 million of net worth, and serve as a differentiator to the company as it looks to attract RIAs.
“So many times, financial advisors may consider selling their business to a rollup strategy, and they’re kind of on their own,” Jackson said. “They’re not provided any additional resources to truly grow their business, where we’ve got thousands of inquiries monthly that we can help them grow their business that fall in line with what we’re looking to establish within our own asset management funds.”
