Adding to the density that already exists in the region, Dallas could soon have another publicly traded firm—one that’s looking to take on the nearly $12 trillion alternative asset market.
Via a merger with San Francisco blank-check company Avalon Acquisition Inc., financial services platform The Beneficient Company Group could trade on the Nasdaq in a deal that values it at $3.5 billion.
“We began Beneficient based on the simple yet ambitious belief that individual investors and smaller institutions should be empowered with the same opportunities as large institutional investors when it came to their alternative investments,” Brad Heppner, Beneficient founder and CEO, said in a statement. “We’re working to democratize the industry starting with a simple, secure, rapid and cost-effective solution to what we saw as the most foundational and pressing need: liquidity.”
Generating about $1.1B in liquidity
With a Technology-Enabled Fiduciary Financial Institution charter from the Kansas Office of the State Bank Commissioner, Beneficient’s end-to-end platform provides liquidity, data custody, and trust services for alternative asset holders.
The company says that since 2017 it has delivered liquidity on around $1.1 billion in net asset value to high-net worth individuals and small- to mid-sized institutions across investment types ranging from private equity and venture capital to endowments and private real estate investment trusts. It added that nearly $400 million of that liquidity was delivered over the past year.
Last year, Beneficient generated $76.7 million in revenue, according to SPACInsider, which notes that the company saw an operating loss of $71.1 million.
Existing Beneficient shareholders to own 88% of combined company
Beneficient said the deal with Avalon, which closed its $207 million initial public offering last October, will allow it to offer more liquidity options and better serve investors by accessing the capital markets.
“The total addressable market for liquidity and ancillary services for alternative asset investors is large and growing considerably,” Craig Cognetti, Avalon CEO, said in a statement. “Existing solutions for individuals and smaller institutions are cost prohibitive and time consuming, leaving their needs largely unmet.”
Subject to stockholder approval and other closing conditions, the deal, which includes around $200 million in gross proceeds from Avalon’s cash in trust, is expected to close in the first half of next year. Following that, the combined company—named Beneficient—will trade on the Nasdaq with existing Beneficient shareholders expected to continue to own 88% of the combined company.
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