Abacus Global Management, Inc. (ABL)

Executive Summary / Key Takeaways

• Strategic Metamorphosis Complete: Abacus Global Management has evolved from a pure life settlement trader into a three-segment alternative asset manager with $2.9 billion in AUM, proprietary mortality verification technology, and recurring fee income that should command premium valuations versus transaction-based peers.

• Capital Efficiency at Scale: The company's 2x annualized policy turnover and successful $50 million securitization demonstrate an industrialized process for converting balance sheet assets into fee streams, lowering cost of capital while expanding institutional distribution channels.

• Technology Moat Emerging: ABL Tech, launched in early 2024, has already secured major pension fund clients and is tracking toward one million lives monitored by Q1 2025, with management expecting material earnings contribution by summer 2026—a catalyst not yet reflected in valuation.

• Financial Inflection Point: Q3 2025 marked the tenth consecutive quarter of beating consensus, with Life Solutions realizing 36.6% gains (vs. 19% prior year) and Asset Management generating $8.6 million in quarterly revenue from acquisitions that closed just three quarters ago, proving the M&A integration model works.

• Valuation Disconnect: Trading at 5.8x EV/Revenue and 15.8x EV/EBITDA with an 87.5% gross margin, ABL trades at a fraction of larger alternative asset managers despite superior growth rates, while initiating a 2.4% dividend yield and $10 million buyback that signal management confidence.

Setting the Scene: From Trader to Technology-Enabled Asset Manager

Abacus Global Management, originally founded as Abacus Life in 2004 in Orlando, Florida, spent its first two decades building a dominant position in the niche life settlements market. The company mastered the art of acquiring life insurance policies from seniors who no longer needed coverage, holding them on balance sheet, and monetizing them through institutional sales. This model generated consistent profits but faced inherent constraints: capital intensity, regulatory scrutiny, and the natural limit of a $4.6 billion annual market.

The transformation began in earnest in 2024. Management recognized that scale alone wouldn't unlock the next leg of growth—diversification and technology would. The company executed two transformative acquisitions in late 2024: Carlisle Management Company, a Luxembourg-based life settlement investment manager, and FCF Advisors, a New York-based asset manager specializing in free cash flow strategies. These deals, closed simultaneously in December 2024, added $2.6 billion in AUM overnight and established the Asset Management segment as a fee-generating powerhouse.

Simultaneously, the company launched ABL Tech in early 2024, a technology services platform providing real-time mortality verification to pension funds and insurers. This wasn't a side project—it represented a fundamental expansion of the addressable market beyond life settlements into the much larger market for actuarial data services. By August 2024, the division had signed its first public pension client and one of the largest union pension funds in the United States.

The strategic rationale is clear: life settlements provided the expertise and data foundation, but technology and asset management provide the scalability and recurring revenue that public markets reward. The company rebranded to Abacus Global Management in February 2025 to reflect this evolution. The question for investors is whether this transformation can deliver sustainable, high-margin growth that justifies a re-rating.

Technology, Products, and Strategic Differentiation

The ABL Tech Advantage

ABL Tech's value proposition rests on a simple but powerful insight: pension funds and insurers struggle with mortality verification for millions of policyholders and beneficiaries. Traditional methods are slow, manual, and prone to error. Abacus leveraged its two decades of life settlement data—tracking when policies mature and why—to build a real-time verification platform that is both more accurate and faster than legacy systems.

The commercial traction validates this approach. Within months of launch, ABL Tech won four of five RFPs it bid on, secured a major public pension fund, and landed one of the largest union pension funds in the U.S. Management expects to monitor over one million lives by Q1 2025, with contracts spanning three to five years and automatic renewals. This creates a sticky, recurring revenue base with minimal incremental capital requirements.

Why does this matter for the investment thesis? First, it diversifies revenue away from the cyclical life settlement market. Second, it leverages existing data assets to generate high-margin service income. Third, it positions Abacus as a technology provider rather than just a financial intermediary—a distinction that typically commands higher valuations. Management expects the division to reach profitability by summer 2026, suggesting the $1.3 million in year-to-date losses are temporary investments in a much larger opportunity.

Proprietary Underwriting in Life Solutions

The Life Solutions segment demonstrates Abacus's core competency: extracting maximum value from life insurance policies. In Q3 2025, the company achieved a 36.6% average realized gain on policies sold, nearly double the 19% from Q3 2024. This improvement didn't happen by accident—it reflects the company's expanded capital base from a $90 million equity raise in November 2024 and a $100 million debt facility in December 2024, which enabled larger, more selective acquisitions.

More importantly, the company has industrialized its holding process. Policies sold in Q3 had been held for an average of 363 days, while policies still owned averaged just 253 days. This demonstrates a disciplined approach to realizing gains on seasoned positions while cycling capital quickly. The 2x annualized turnover ratio aligns with management's long-term target of 1.5-2x, proving the model scales efficiently.

The "so what" is profound: Abacus isn't gambling on mortality tables—it's running a systematic trading operation that monetizes data advantages. The company targets two turns per year on its balance sheet, with historical hold periods of four to six months. This capital velocity means each dollar of equity can generate multiple dollars of revenue annually, amplifying returns without requiring proportional capital increases.

Financial Performance & Segment Dynamics

Asset Management: The Fee Engine Awakens

The Asset Management segment's performance is nothing short of remarkable. Q3 2025 revenue of $8.63 million represents a year-over-year increase of over 7,000% from the $0.12 million baseline. More impressively, this is the segment's third full quarter since the December 2024 acquisitions, meaning the integration is proceeding ahead of schedule.

The segment generated $102 million in new inflows during Q3 alone, bringing year-to-date inflows to $468 million. With AUM reaching $2.91 billion by September 2025, up from $2.59 billion at year-end 2024, the segment is on a clear path to $3+ billion. The economics are compelling: gross margins are running at approximately 50% ($4.29 million gross profit on $8.63 million revenue), and management is explicitly targeting higher fee-based revenue because it "naturally commands higher valuations."

This segment transforms Abacus's financial profile. Life Solutions revenue, while growing 93% in Q3, remains transactional and capital-intensive. Asset Management revenue is recurring, scalable, and requires minimal incremental capital. As this segment grows from 14% of total revenue toward a target of 30-40%, the company's overall margin structure should improve materially, justifying a higher multiple.

Life Solutions: Proving Capital Efficiency

Life Solutions delivered $54.12 million in Q3 revenue, up 93% year-over-year, driven by a $31.46 million increase in realized gains. The segment's gross profit of $51.58 million implies a 95% gross margin—exceptional for any business, but particularly for one trading financial assets. This reflects the company's ability to acquire policies at discounts deep enough to absorb premium payments and still generate outsized gains.

The policy count declining from 719 at year-end 2024 to 522 in September 2025 isn't a sign of weakness—it's evidence of the turnover strategy working. The company is actively selling down seasoned positions while maintaining origination capacity. Capital deployed of $102.4 million in Q3 shows consistent investment, and the 36.6% realized gain demonstrates pricing power in a market where institutional demand for uncorrelated assets is growing.

The key insight is that Life Solutions is becoming more efficient, not just larger. The combination of higher realized gains and faster turnover means returns on equity are improving even as the asset base grows.

Technology Services: The Option Value

Technology Services remains pre-revenue in meaningful terms, with just $0.22 million in Q3 revenue and a $0.56 million gross loss. However, the division's trajectory matters more than its current P&L. Management's guidance that it will be "material to earnings by summer 2026" suggests a potential inflection point that the market hasn't priced in.

The division's four-of-five RFP win rate and multi-year contracts with automatic renewals create a foundation for predictable, high-margin revenue. If ABL Tech can scale to even $5-10 million in annual revenue with 70%+ gross margins, it would validate the company's technology moat and provide a third growth engine beyond asset management and life settlements.

Outlook, Management Guidance, and Execution Risk

Management's confidence is evident in both word and deed. The company raised 2025 adjusted net income guidance after Q3, citing ten consecutive quarters of beating consensus and strong execution across all segments. This isn't promotional rhetoric—it's backed by tangible capital allocation decisions.

The initiation of a $0.20 annual dividend and $10 million share repurchase program in November 2025 signals a fundamental shift. Management describes this as a "natural evolution" aligning Abacus with other public alternative asset managers. The dividend is set at less than 25% of adjusted net income or 55% of recurring revenue, ensuring it doesn't constrain growth investment. Critically, the company states it has "the capital strength to fund ongoing growth through new originations, accretive acquisitions, and technology investment while also returning capital to shareholders."

The securitization transaction in October 2025—selling $50 million of life insurance assets as an above-investment-grade collateralized note—validates the underwriting model and creates a repeatable template. Management views this as "the first of many," building infrastructure to lower cost of capital and expand distribution to banks and insurance investors. This converts balance sheet assets into fee-based servicing income, enhancing profitability and return on equity.

Execution risks remain. Management expressed caution in Q2 about sequential growth, noting "unpredictable things in the overall economy." However, historical seasonality (Q3/Q4 strength), increased marketing spend, and growing institutional demand for uncorrelated assets provide offsets. The company expects EBITDA margins to exceed 50% consistently as recurring fee income grows.

Risks and Asymmetries

The Coventry Lawsuit

In July 2025, Abacus filed a lawsuit against Coventry First and its Chairman Alan Buerger, alleging a multi-year campaign of defamation and anticompetitive conduct. The suit seeks hundreds of millions in damages. The significance of this is clear: If successful, the lawsuit could remove a key competitor and validate Abacus's market position. If unsuccessful, it could become a costly distraction and expose the company to counterclaims. Investors should monitor case developments closely, as the outcome could materially impact both competitive dynamics and financial resources.

Scale Constraints

Abacus's $811 million market cap and $2.9 billion AUM are fractions of competitors like Apollo ($86 billion market cap, $908 billion AUM) or Blackstone ($185 billion market cap, trillions in AUM). This scale disadvantage manifests in two ways: higher cost of capital relative to the largest players, and limited ability to compete for the largest policy portfolios.

The severity depends on execution. If Abacus can maintain its 2x turnover and 36%+ realized gains, the capital efficiency offsets scale disadvantages. But if larger competitors use their balance sheets to drive up policy acquisition prices, Abacus's margins could compress. The securitization program directly addresses this by accessing institutional capital at lower rates, but success isn't guaranteed.

Regulatory Concentration

With only about ten licensed providers in the U.S. life settlements market, regulatory changes could disproportionately impact Abacus. The company faces scrutiny over senior protection and valuation practices. Any tightening of licensing requirements or changes in tax treatment could reduce origination volumes or increase compliance costs.

The mitigating factor is Abacus's technology advantage. ABL Tech's mortality verification capabilities could become a regulatory compliance tool, turning a risk into an opportunity. However, until the division scales, regulatory risk remains a key watchpoint.

Valuation Context

At $8.30 per share, Abacus trades at 5.8x EV/Revenue and 15.8x EV/EBITDA, with an enterprise value of $1.14 billion. This represents a significant discount to larger alternative asset managers: Apollo (APO) trades at 3.2x EV/Revenue but with slower growth; Blackstone (BX) at 17.3x EV/Revenue; KKR (KKR) at 8.2x; Ares (ARES) at 12.7x.

The more relevant comparison is growth-adjusted multiples. Abacus's Q3 revenue growth of 124% (total) and over 7,000% (Asset Management) far exceeds any peer. Its 87.5% gross margin surpasses all competitors except Blackstone's 100% (which reflects its fee-based model). The 35.6% operating margin is competitive with Apollo's 29.9% and KKR's 31.0%.

The 2.4% dividend yield provides immediate income while investors wait for the transformation to play out. The $10 million buyback, while modest relative to market cap, signals management believes the stock is undervalued.

The negative operating cash flow (-$32.75 million quarterly) reflects growth investments and working capital needs in Life Solutions. As Asset Management scales and Technology Services reaches profitability, cash generation should improve. The $150 million debt facility secured in December 2024 provides ample liquidity to fund this transition without diluting equity.

Conclusion

Abacus Global Management has completed a strategic transformation that positions it as a technology-enabled alternative asset manager in a niche market with high barriers to entry. The combination of 25% market share in life settlements, $2.9 billion in rapidly growing AUM, and a proprietary mortality verification platform creates a unique risk/reward profile.

The investment thesis hinges on three factors: (1) the Asset Management segment's ability to scale recurring fee income beyond the $25 million annual run rate established in Q3, (2) ABL Tech's path to profitability and material earnings contribution by 2026, and (3) the Life Solutions segment's continued execution of its 2x turnover strategy with 30%+ realized gains.

If management delivers, the stock's 5.8x EV/Revenue multiple should re-rate toward the 8-12x range typical of faster-growing alternative managers, implying 50-100% upside. The 2.4% dividend and share buyback provide downside mitigation while investors wait for the technology and asset management initiatives to mature.

The primary risks—lawsuit distraction, scale constraints, and regulatory changes—are real but manageable. The company's record of ten consecutive quarterly beats, disciplined capital allocation, and proprietary technology moat suggest these risks are outweighed by the potential for sustained, high-margin growth in an underserved market. For investors willing to look beyond the microcap label, Abacus offers asymmetric exposure to the convergence of alternative assets and financial technology.