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  • Abacus Life Settlements has emerged as a profitable opportunity in the SPAC wreckage, trading down about 35% since its merger.
  • Abacus operates differently from its predecessor, Emergent Capital, by originating policies and selling them to investors or its subsidiary.
  • Abacus has a proven track record of generating significant returns on investment and has attracted capital from major firms like KKR and Apollo.

Among the wreckage of 2021-era SPACs, an interesting, profitable opportunity has emerged. Abacus Life (NASDAQ:ABL) (NASDAQ:ABLLW) deSPAC’d this summer as a three-way merger between Abacus Settlements, Longevity Market Assets, and East Resources Acquisition Company, trading down

Abacus Business Model (Abacus Investor Deck)

Abacus Investment Method Policies (Abacus 10-Q)

Abacus Fair Value Policies (Abacus 10-Q)

Abacus Originations (Abacus Investor Deck)

Abacus Track Record (Abacus Investor Deck)

Abacus Merger (Abacus Investor Deck)

Abacus Warrant Terms (Abacus 10-Q)

  • In the event Abacus receives additional capital injections (like the $35m of fixed senior notes they have just raised) they may deploy at lower incremental returns on capital. Abacus likes to highlight how untapped the market is for their services, but there is a risk they have captured many of the most valuable opportunities in the market.
  • Because of the financial nature of Abacus and its position as a middleman purchasing and selling investments, there will always be a risk of “something” going sideways. I think their business model cracks the code where Emergent failed, but we may eventually learn of a fatal flaw in the Abacus business model as well. For example:
  • Abacus’s debt includes the following indexed private placement notes, some of which are indexed to the S&P 500. In the event of significant market moves, Abacus will have significantly divergent obligations under these notes. They are hedged via options, but this is something to be aware of:

Abacus Debt (Abacus 10-Q)


Blake Gallimore

Author Blake Gallimore

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