Q2 2026 Abacus Global Management Inc Earnings Call

Speaker #1: All participants will be in a listen-only mode. Please signal a conference specialist by pressing the star key, followed by 0. After today's presentation, there will be an opportunity to ask questions.

Speaker #1: To ask a question, please press star 1 on your keypad at any time. Please note this event is being recorded. I would now like to turn the call over to David Jackson, Abacus Global Management's Head of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Operator. And thank you, everyone, for joining Abacus Global Management's second quarter earnings call. Here with me today are Jay Jackson, Chairman and Chief Executive Officer; Elena Plesco, Chief Investment Officer; and Bill McCauley, Chief Financial and Chief Operating Officer.

Speaker #2: This afternoon at 4:15 PM Eastern Time, Abacus Global Management released our second quarter 2026 results. This afternoon's call will allow participants to ask questions about our results.

Speaker #2: Before we begin, Abacus Global Management refers participants on this call to the investor web page ir dot abacusgm dot com for the press release, investor information, and filings with the SEC for a discussion of the risks that can affect the business.

Speaker #2: Abacus Global Management, more specifically, refers participants to the presentation furnished today on Form 8K with the securities and exchange commission and reminds listeners that some of the comments today may contain forward-looking statements and, as such, will be subject to risk and uncertainties, which, if they materialize, could materially affect results.

Speaker #2: More information on the risks and uncertainties and assumptions relating to forward-looking statements please refer to Abacus Global Management's public filings. During the call, we will reference certain non-GAAP financial measures.

Speaker #2: Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under U.S.

Speaker #2: generally accepted accounting principles or GAAP. Please see our public filings for additional information regarding our non-GAAP financial measures, including references to comparable GAAP measures.

Speaker #2: With that, I'd now like to turn the call over to Jay Jackson, Abacus Global Management's Chairman and Chief Executive Officer.

Speaker #3: Thank you, David. And thanks to everyone for joining us. We are thrilled to see so many of you in person at the NYSE last month for our investor day.

Speaker #3: Where we shared our vision for Abacus Global Management. We'd encourage everyone to listen to the replay available on our IR website. For those that weren't able to join, our message from investor day was clear: we have high conviction that traditional asset management will be revolutionized.

Speaker #3: And improved via personalized longevity data. More importantly, we firmly believe Abacus is uniquely positioned as the leading data and technology platform to enable that revolution.

Speaker #3: Start with the number that is reshaping our entire industry. 124 trillion dollars. Over the next three decades, that is what will pass from baby boomers to their children, and grandchildren.

Speaker #3: The largest wealth transfer in history. In nearly every dollar of it is being planned today on a guess. Every financial plan assumes an answer to one question: how long will the money need to last?

Speaker #3: And almost none of them actually have one. They reach for a population average on the single most important input of all. But nobody is average.

Speaker #3: The opportunity is to replace that guess with a personalized lifespan, and that is exactly what LifeArc does. Turning an individual's medical, genetic, medication, and biometric data into a portfolio built around the life they actually live.

Speaker #3: This is possible because we have a 20-year head start built on exactly that data. Which positions Abacus to be the intelligence layer for lifespan-linked finance.

Speaker #3: The clearest way to frame that is a company you all know. Amazon built AWS to run its own marketplace. And it became one of its most important profit engines.

Speaker #3: Our origination platform is our commerce engine, and LifeArc is our AWS. The growth is already showing up in our results. Through the first half of 2026, we raised $544.2 million in inflows into our longevity funds.

Speaker #3: Surpassing our $500 million target for the period, and comparing to approximately $604 million for all of 2025. Separately, we are in the very early days of putting LifeArc to work for others, and this is where the wealth transfer opportunity comes to life.

Speaker #3: Our partnership with Maneet and a peer will let their advisors apply personalized lifespan modeling across the 18 billion dollars they manage for 3,400 clients.

Speaker #3: Maneet and a peer is not the exception. It is the playbook. And that playbook points to something bigger. So when we talk about Abacus, we are not a traditional asset manager.

Speaker #3: We are building the infrastructure for lifespan-linked finance. Our mission is to own the data, products, and distribution rails that let advisors build portfolios around each individual's specific lifespan drivers.

Speaker #3: So the next generation invests those 124 trillion dollars around real lifespans, rather than generic averages. That's the opportunity we're building toward. In this quarter, gave us real evidence we're on the right path.

Speaker #3: Bill will take you through the specifics of the quarter in a moment, but I want to pull out two highlights I'm especially excited about.

Speaker #3: First, we received SEC effectiveness for and launched the ABX longevity growth and income fund, ticker ABXGX. Our first registered interval fund dedicated to the longevity asset class.

Speaker #3: For the first time, individual investors and their advisors can access this asset class through a registered vehicle, and it's a direct realization of the strategy we laid out at investor day.

Speaker #3: Second, in building on that same drive to open up the asset class, is asset tokenization. Let me be clear about what this is. And what it isn't.

Speaker #3: For Abacus, this is not a crypto strategy. It's a financial infrastructure. We're building an immutable on-chain record of each policy's chain of title, liens, and cash flow rights, which makes the secondary life insurance market more transparent, more transferable, and more investable.

Speaker #3: This is a market that is historically been opaque and hard to transact and putting it on-chain begins to change that. We've already started tokenizing enforced policies, and we see this as infrastructure that builds on the strength of our origination platform as we continue to grow our recurring fee-based revenue.

Speaker #3: Bill's milestones show the kind of progress we're making. Turning to the nearer term, we feel very good about the trajectory of the business as we move through the balance of the year.

Speaker #3: Alongside our results, we're providing guidance for the third quarter, the momentum we built in the first half across our origination platform and disciplined monetization gives us real confidence in where we're headed.

Speaker #3: With that, I'll turn it over to Bill to take you through the quarter in detail.

Speaker #2: Thank you, Jay. Today I'll start by detailing our strong operating results for the quarter across our origination platform, fund management, profitability, and continued scaling of our operating cash flow.

Speaker #2: Next, I will detail our outlook for 2026 from here, including our expectations for the third quarter, and close out with an update on the Maneet and a peer integration.

Speaker #2: To begin, as Jay noted, Abacus continued its momentum from the first quarter with close to 200 million in capital deployed in Q2. Which brought our year-to-date capital deployed to 362 million.

Speaker #2: While maintaining discipline, our platform continued to accelerate the number of policies under review. In Q2, we have been able to review 9,314 qualified policies as compared to 8,786 qualified policies in Q1, with total policies reviewed year-to-date including non-qualified reaching over 50,000.

Speaker #1: To monetization gives us real confidence in where we're headed. With that, I'll turn it over to Bill to take you through the quarter in detail.

Speaker #2: A milestone we've been able to achieve by augmenting both top-of-the-funnel leads in our review time of each case with artificial intelligence. As we look to the second half of 2026, we expect inbound policies under review to continue to grow as we further penetrate and leverage distribution channels including Maneet and a peer.

Speaker #2: Thank you, Jay. Today I'll start by detailing our strong operating results for the quarter across our origination platform, fund management, profitability, and continued scaling of our operating cash flow.

Speaker #2: Next, I will detail our outlook for 2026 from here, including our expectations for the third quarter, and close out with an update on the manning in the peer integration.

Speaker #2: Now, let me review our financial results for the quarter. Abacus grew revenue by 30% over last year to $73 million. Our growth was driven by life solutions, which grew 38.3% to $65.4 million year over year.

Speaker #2: To begin, as Jay noted, Abacus continued its momentum from the first quarter with close to $200 million in capital deployed in Q2, which brought our year-to-date capital deployed to $362 million.

Speaker #2: This growth was partially offset by lower asset management fees, primarily due to a decline in AUM in our ETF strategies, driven by both market conditions and outflows.

Speaker #2: While maintaining discipline, our platform continued to accelerate the number of policies under review. In Q2, we have been able to review 9,314 qualified policies as compared to 8,786 qualified policies in Q1, with total policies reviewed year-to-date including non-qualified reaching over 50,000.

Speaker #2: Those declines have been offset by robust inflows into our longevity funds, totaling 256 million for the quarter. As Jay noted, we continue to see significant potential to capitalize on the power of LifeArc and remain confident that both asset management and technology service fee revenue will make up a growing portion of our revenue base in the future.

Speaker #2: A milestone we've been able to achieve by augmenting both top-of-the-funnel leads in our review time of each case with artificial intelligence. As we look to the second half of 2026, we expect inbound policies under review to continue to grow as we further penetrate and leverage distribution channels, including manning in the peer.

Speaker #2: To that point, technology service fees year-to-date are approaching $1 million which is in line with the continued build-out and adoption of that business. Moving to our expenses, total operating expense totaled $42.5 million for the quarter.

Speaker #2: Now, let me review our financial results for the quarter. Abacus grew revenue by 30% over last year to 73 million. Our growth was driven by life solutions, which grew 38.3% to 65.4 million year-over-year.

Speaker #2: The year-over-year increase is largely driven by increases in strategic business expenses and other personnel costs from acquisitions and growth as we are ramping the asset management, wealth management, and technology sides of the platform.

Speaker #2: This growth was partially offset by lower asset management fees, primarily due to a decline in AUM in our ETF strategies, driven by both market conditions and outflows.

Speaker #2: Moving to profitability, our adjusted net income, which excludes non-cash stock compensation, non-recurring expenses related to business acquisitions and special projects, totaled $27.1 million or $28 cents per diluted share.

Speaker #2: Those declines have been offset by robust inflows into our longevity funds, totaling 256 million for the quarter. As Jay noted, we continue to see significant potential to capitalize on the power of LifeArc and remain confident that both asset management and technology service fee revenue will make up a growing portion of our revenue base in the future.

Speaker #2: We are pleased to be able to say that these numbers are above our Q2 guidance provided in May of 24 to 26 million of adjusted net income and 24 to 26 cents of adjusted EPS.

Speaker #2: To reiterate the point, Abacus is committed to responsible growth that maintains operating margins and mitigates consolidated profitability. Looking at our adjusted EBITDA, the second quarter was successful as we generated $40 million which is a 27% increase compared to last year.

Speaker #2: To that point, technology service fees year-to-date are approaching 1 million, which is in line with the continued build-out and adoption of that business. Moving to our expenses, total operating expense totaled 42.5 million for the quarter, the year-over-year increase is largely driven by increases in strategic business expenses and other personnel costs from acquisitions and growth as we are ramping the asset management, wealth management, and technology sides of the platform.

Speaker #2: Our adjusted EBITDA margin for the quarter was a healthy 55%. Overall, we are very pleased with the strength in the platform growth including investments we are making for future growth.

Speaker #2: Q2 marked another quarter of very strong 30% and 27% respective revenue and EBITDA growth at similar margins. Finally, turning to our balance sheet, our adjusted return on equity was 25% or $400 basis points higher year over year.

Speaker #2: Moving to profitability, our adjusted net income, which excludes non-cash stock compensation, non-recurring expenses related to business acquisitions and special projects, totaled 27.1 million or 28 cents per diluted share.

Speaker #2: We are pleased to be able to say that these numbers are above our Q2 guidance provided in May of 24 to 26 million of adjusted net income and 24 to 26 cents of adjusted EPS.

Speaker #2: Our cash balance ended the quarter at $23.4 million with policy assets totaling $383 million. Our long-term debt balance excluding any non-recourse liabilities stands at $290.8 million.

Speaker #2: To reiterate the point, Abacus is committed to responsible growth that maintains operating margins and mitigates consolidated profitability. Looking at our adjusted EBITDA, the second quarter was successful as we generated 40 million, which is a 27% increase compared to last year.

Speaker #2: For the third quarter, we expect adjusted net income of $26 to $28 million and adjusted EPS of $26 to $28 cents per share. For the full year, following the increase to our guidance last quarter, we are reiterating our expectation for adjusted net income of $100 to $106 million and adjusted EPS of $1 to $1.05 per share.

Speaker #2: Our adjusted EBITDA margin for the quarter was a healthy 55%. Overall, we are very pleased with the strength in the platform growth, including investments we are making for future growth.

Speaker #2: More broadly, we feel good about the trajectory of the business as we move through the second half. The confidence is grounded in the strength of our origination platform, disciplined monetization, and the continued build-out of our fee-based and technology revenue.

Speaker #2: Q2 marked another quarter of very strong 30% and 27%, respective revenue and EBITDA growth, as similar margins. Finally, turning to our balance sheet, our adjusted return on equity was 25% or 400 basis points, higher year over year.

Speaker #2: Let me also cover one housekeeping item on how we present guidance. Our adjusted net income guidance is provided on a gross basis. Meaning that any adjustments are made before tax effects.

Speaker #2: Our cash balance ended the quarter at 23.4 million, with policy assets totaling 383 million. Our long-term debt balance, excluding any non-recourse liabilities, stands at 290.8 million.

Speaker #2: Consistent with how we have historically provided guidance and the basis on which our covering analyst model. To reduce any chance of confusion, we are now also providing the tax effected or net equivalence.

Speaker #2: For the third quarter, we expect adjusted net income of 26 to 28 million, and adjusted EPS of 26 to 28 cents per share. For the full year, following the increase to our guidance last quarter, we are reiterating our expectation for adjusted net income of 100 to 106 million, and adjusted EPS of $1 to $1.05 per share.

Speaker #2: Beginning with our first quarter 10Q, we included a schedule reconciling our gross adjusted net income and EPS to their net equivalence. That reconciliation appears again in our second quarter 10Q.

Speaker #2: The approximate tax rate bridging gross add-back items to net is 25%. Other than the tax effect, the assumptions for the gross and net figures are identical.

Speaker #2: More broadly, we feel good about the trajectory of the business as we move through the second half. That confidence is grounded in the strength of our origination platform, disciplined monetization, and the continued build-out of our fee-based and technology revenue.

Speaker #2: Over time, we expect to transition towards guiding on a net basis and we are providing both figures now to make that transition seamless. Lastly, I want to touch on some of the early success of the operational integration with Maneet and a peer.

Speaker #2: Let me also cover one housekeeping item on how we present guidance. Our adjusted net income guidance is provided on a gross basis. Meaning that any adjustments are made before tax effects.

Speaker #2: Since closing the investment in May, we have established a live referral channel between the two firms and we are converting Abacus's own unqualified leads into Maneet and a peer wealth management clients.

Speaker #2: Consistent with how we have historically provided guidance and the basis on which our covering analyst model. To reduce any chance of confusion, we are now also providing the tax-affected or net equivalents.

Speaker #2: Putting people who came to us for one need into a full advisory relationship. At the same time, we are mining the policies held on their end and working through their books of business to identify qualified policies that are candidates for settlement.

Speaker #2: Beginning with our first quarter 10-Q, we included a schedule reconciling our gross adjusted net income and EPS to their net equivalents. That reconciliation appears again in our second quarter 10-Q.

Speaker #2: Surfacing value that was sitting untapped in their existing client base. And underpinning all of it, we have begun rolling out LifeArc across their advisor network.

Speaker #2: The approximate tax rate bridging gross add-back items to net is 25%. Other than the tax effect, the assumptions for the gross and net figures are identical.

Speaker #2: Putting personalized lifespan modeling directly into the hands of people who sit across from those clients every day. Taken together, these are exactly the early proof points we had hoped to see.

Speaker #2: Over time, we expect to transition towards guiding on a net basis, and we are providing both figures now to make that transition seamless. Lastly, I want to touch on some of the early success of the operational integration with manning in the peer.

Speaker #2: And they give us real confidence in how this playbook extends to the next quarter. So with that, let me turn the call to Elena to review performance of our balance sheet and investment strategy.

Speaker #3: Thanks, Bill. This quarter, I want to do three things. Walk through how the balance sheet performed. Talk about what we built on the asset management side and how we funded it.

Speaker #2: Since closing the investment in May, we have established a live referral channel between the two firms, and we are converting Abacus's own unqualified leads into many of the peer wealth management clients.

Speaker #3: And then step back and put our results in the context of what is happening in the broader alternatives market. Because the contrast this quarter is a big part of the story.

Speaker #2: Putting people who came to us for one need into a full advisory relationship. At the same time, we are mining the policies held on their end and working through their books of business to identify qualified policies that are candidates for settlement.

Speaker #3: Let me start with the balance sheet. For the second quarter, annualized portfolio turnover was two times. At the top end of our long-term target range of one and a half to two times.

Speaker #2: Surfacing value that was sitting untapped in their existing client base. And underpinning all of it, we have begun rolling out LifeArc across their advisor network.

Speaker #3: That level of turnover reflects continued demand for the assets we originate and our ability to recycle capital efficiently while holding our underwriting discipline. We deployed approximately $197.9 million of capital during the quarter.

Speaker #2: Putting personalized lifespan modeling directly into the hands of people who sit across from those clients every day. Taken together, these are exactly the early proof points we had hoped to see.

Speaker #2: And they give us real confidence in how this playbook extends to the next quarter. So with that, let me turn the call to Elena to review performance of our balance sheet and investment strategy.

Speaker #3: Up 62% year over year. Which tells you origination volume and investor appetite are both strong. Our average realized gain on policy sales was approximately 25%.

Speaker #1: Thanks, Bill. This quarter, I want to do three things: walk through how the balance sheet performed, talk about what we built on the asset management side, and discuss how we funded it.

Speaker #3: Comfortably above our long-term target of 20%. I want to underline what that number represents. Because it is central to how we think about the business.

Speaker #1: And then step back and put our results in the context of what is happening in the broader alternatives market. Because the contrast this quarter is a big part of the story.

Speaker #3: Return our book roughly twice a year which means these are not marks on a screen. They are realized transactions at real prices with real counterparties.

Speaker #1: Let me start with the balance sheet. For the second quarter, annualized portfolio turnover was two times. At the top end of our long-term target range of one and a half to two times.

Speaker #3: Every turn of the book is a validation of the fair value we carry. In a market that is right now spending a great deal of energy debating whether private assets marks are real, that distinction matters.

Speaker #1: That level of turnover reflects continued demand for the assets we originate, and our ability to recycle capital efficiently while holding our underwriting discipline. We deployed approximately 197.9 million of capital during the quarter, up 62% year over year.

Speaker #3: And I will come back to that. One measure of the balance sheet efficiency worth noting is holding period. Policies we sold this quarter were held on average for approximately 230 days versus approximately 153 days for policies still on the balance sheet.

Speaker #1: Which tells you origination volume and investor appetite are both strong. Our average realized gain on policy sales was approximately 25%. Comfortably above our long-term target of 20%.

Speaker #3: That's 77-day gap shows we're monetizing more seasoned positions while keeping the newer high-conviction assets working for us as they season. Now let me turn to asset management.

Speaker #1: I want to underline what that number represents. Because it is central to how we think about the business. Return our book roughly twice a year, which means these are not marks on a screen.

Speaker #3: Because this is where the strategy really advanced this quarter. The headline is the launch of the ABX longevity growth and income fund. Which received SEC effectiveness right after the quarter end.

Speaker #1: They are realized transactions at real prices with real counterparties. Every turn of the book is a validation of the fair value we carry. In a market that is right now spending a great deal of energy debating whether private assets marks are real, that distinction matters.

Speaker #3: This is the first registered interval fund dedicated to the longevity asset class. And it opens our strategies to individual investors and their advisors for the first time.

Speaker #1: And I will come back to that. One measure of the balance sheet efficiency worth noting is holding period. Policies we sold this quarter were held on average for approximately 230 days, versus approximately 153 days for policies still on the balance sheet.

Speaker #3: That is a structural expansion of who can access this asset class. Not just another product. On fundraising, our longevity funds collectively raised $544.2 million in the first half of the year.

Speaker #1: That's 77-day gap shows we're monetizing more seasoned positions while keeping the newer, high-conviction assets working for us as they season. Now let me turn to asset management.

Speaker #3: Surpassing the $500 million target we set for the period. Capital inflows into those funds in the second quarter alone were approximately $256.1 million and management and servicing fees across the longevity funds were $6.5 million for the quarter.

Speaker #1: Because this is where the strategy really advanced this quarter. The headline is the launch of the ABX Longevity Growth and Income Fund, which received SEC effectiveness right after the quarter end.

Speaker #3: Total fee-paying AUM across the platform now sits at roughly $3.2 billion and total AUM at $3.5 billion. It is worth stepping back to see how the two sides of the house relate.

Speaker #1: This is the first registered interval fund dedicated to the longevity asset class. And it opens our strategies to individual investors and their advisors for the first time.

Speaker #3: Because we manage capital in two places and they run off one engine. The balance sheet originates the assets. The funds are distinct vehicles. But they draw on the same origination platform, the same underwriting discipline, and the same servicing infrastructure.

Speaker #1: That is a structural expansion of who can access this asset class. Not just another product. On fundraising, our longevity funds collectively raised $544.2 million in the first half of the year.

Speaker #3: Structured for recurring distributions and long-dated capital appreciation. That is the point of the whole model. And it is the proof the flywheel works. The balance sheet demonstrates in cash that these assets perform as underwritten the funds let outside investors participate in that at scale.

Speaker #1: Surpassing the $500 million target we set for the period. Capital inflows into those funds in the second quarter alone were approximately $256.1 million and management and servicing fees across the longevity funds were $6.5 million for the quarter.

Speaker #3: As we grow fee-paying AUM, we grow management fee revenue, without a proportional increase in balance sheet capital. Which improves both returns and capital efficiency over time.

Speaker #1: Total fee-paying AUM across the platform now sits at roughly $3.2 billion and total AUM at $3.5 billion. It is worth stepping back to see how the two sides of the house relate.

Speaker #3: Share of fee-related revenue is still in the teens of our mix today. And our target is 70% by 2030. Let me now put all of this in the context of the wider market.

Speaker #1: Because we manage capital in two places and they run off one engine. The balance sheet originates the assets. The funds are distinct vehicles. But they draw on the same origination platform, the same underwriting discipline, and the same servicing infrastructure.

Speaker #3: Because I think it frames why our results look the way they do. The dominant story across alternatives right now is private credit. And specifically the pressure it is under.

Speaker #1: Structured for recurring distributions, and long-dated capital appreciation. That is the point of the whole model. And it is the proof the flywheel works. The balance sheet demonstrates, in cash, that these assets perform as underwritten, the funds let outside investors participate in that at scale, as we grow fee-paying AUM, we grow management fee revenue, without a proportional increase in balance sheet capital.

Speaker #3: Over the last two quarters, we have seen meaningful redemption activity in non-traded credit vehicles. Slowing fundraising in parts of that market. And rating agencies openly watching liquidity cushions at credit-focused funds.

Speaker #3: Sales of non-listed BDCs fell sharply in the first quarter. The debate has shifted from how fast private credit can grow to whether the marks are honest and whether the liquidity terms hold up under stress.

Speaker #1: Which improves both returns and capital efficiency, over time. Share of fee-related revenue is still in the teens of our mix today. And our target is 70% by 2030.

Speaker #3: Most of the large managers have argued reasonably that the stresses idiosyncratic. Rather than systemic. I'm not here to litigate that. What I want to point out is why it is largely not our problem.

Speaker #1: Let me now put all of this in the context of the wider market. Because I think it frames why our results look the way they do.

Speaker #3: Our assets are not corporate credit. They're performance is tied to mortality, not to interest rates, spreads, borrower profitability, or the economic cycle. That is the definition of an uncorrelated return and it is exactly what institutional allocators say they're looking for when they diversify away from crowded corporate credit exposure.

Speaker #1: The dominant story across alternatives right now is private credit. And specifically the pressure it is under. Over the last two quarters, we have seen meaningful redemption activity in non-traded credit vehicles.

Speaker #1: Slowing fundraising, in parts of that market. And rating agencies openly watching liquidity cushions at credit-focused funds. Sales of non-listed BDCs, fell sharply in the first quarter.

Speaker #3: When the concern in the market is whether an asset can be sold at its carried value, we have a book that turns twice a year and tells us the answer in cash.

Speaker #1: The debate has shifted from how fast private credit can grow to whether the marks are honest and whether the liquidity terms hold up under stress.

Speaker #3: And when the concern is liquidity mismatch, our interval fund is purpose-built to align investor liquidity with the underlying assets rather than promise daily liquidity against illiquid holdings.

Speaker #1: Most of the large managers have argued reasonably that the stresses idiosyncratic. Rather than systemic. I'm not here to litigate that. What I want to point out is why it is largely not our problem.

Speaker #3: So the environment that is creating stress elsewhere is for us a demonstration of why this asset class exists. Uncorrelated, cash-validated, and structurally matched. That is the pitch.

Speaker #1: Our assets are not corporate credit. They're performance is tied to mortality, not to interest rates, spreads, borrower profitability, or the economic cycle. That is the definition of an uncorrelated return and it is exactly what institutional allocators say they're looking for when they diversify away from crowded corporate credit exposure.

Speaker #3: And this quarter, the results supported it. Stepping back, the story remains straightforward. We run differentiated origination platform supported by discipline underwriting and consistent monetization.

Speaker #3: And we're scaling an asset management platform on top of it that is designed to generate a growing base of fee-related earnings. Those priorities are exactly the ones we weighed out at investor day.

Speaker #1: When the concern in the market is whether an asset can be sold at its carried value, we have a book that turns twice a year, and tells us the answer, in cash.

Speaker #1: And when the concern is liquidity mismatch, our interval fund is purpose-built to align investor liquidity with the underlying assets rather than promise daily liquidity against illiquid holdings.

Speaker #3: And the second quarter was real progress against that roadmap. With that, let me turn it back to Jay for some closing thoughts.

Speaker #1: Thank you, Elena. Before we turn to your questions, I'd like to emphasize one important takeaway for our investors and analysts. Clearly, you can hear our excitement for and confidence in how Abacus will change the asset management industry.

Speaker #1: So the environment that is creating stress elsewhere is for us a demonstration of why this asset class exists. Uncorrelated, cash-validated, and structurally matched. That is the pitch.

Speaker #1: To say it again, the opportunity in front of us is generationally massive. And we believe Abacus's platform powered by LifeArc will capture an increasing share of the value our data delivers to asset managers and their investors.

Speaker #1: And this quarter, the results supported it. Stepping back, the story remains straightforward. We run differentiated origination platform, supported by discipline underwriting and consistent monetization.

Speaker #1: So let me end by saying, you've heard me speak to our stock price and market cap in the past. Let me add this. We believe Abacus will become substantially larger based on our current business lines alone.

Speaker #1: And we're scaling an asset management platform on top of it that is designed to generate a growing base of fee-related earnings. Those priorities are exactly the ones we weighed out at investor day.

Speaker #1: And best of all, we have considerable visibility into that growth. This is the primary reason why we continue to repurchase our shares. We're excited to execute and deliver the entire opportunity for our shareholders.

Speaker #1: And the second quarter was real progress against that roadmap. With that, let me turn it back to Jay for some closing thoughts.

Speaker #2: Thank you, Elena. Before we turn to your questions, I'd like to emphasize one important takeaway for our investors and analysts. Clearly, you can hear our excitement for and confidence in how Abacus will change the asset management industry.

Speaker #1: With that, let's turn it back to the operator for your questions.

Speaker #2: Thank you. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

Speaker #2: To say it again, the opportunity in front of us is generationally massive. And we believe Abacus's platform, powered by LifeArc, will capture an increasing share of the value our data delivers to asset managers and their investors.

Speaker #2: If at any time your question has been addressed and you'd like to withdraw your question, please press star, then two. Once again, that is star one to signal and star two to remove.

Speaker #2: We'll take our first question from Patrick Davitt with Autonomous Research. Please go ahead.

Speaker #2: So let me end by saying, you've heard me speak to our stock price and market cap in the past. Let me add this. We believe Abacus will become substantially larger based on our current business lines alone.

Speaker #4: Hey, good evening, everyone. My first questions on the guidance. So you just beat the high end of your guided range for QQ. Be consistent, significantly.

Speaker #2: And best of all, we have considerable visibility into that growth. This is the primary reason why we continue to repurchase our shares. We're excited to execute and deliver the entire opportunity for our shareholders.

Speaker #4: And now guiding to a number above consensus in 3Q. But keeping the full year guide at one to 105. So through that lens, is there something you see in the pipeline that suggests a lower 4Q for some reason?

Speaker #4: Or are you just staying conservative? Thank you.

Speaker #2: With that, let's turn it back to the operator for your questions.

Speaker #1: Yeah, thank you for the question, Patrick. We were just staying conservative on the annual guide. We are looking towards the top end of that guide, which would put us in a really good position for Q4.

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Speaker #1: Just when we were targeting our guidance, we wanted to keep it closer to near term in Q3. And then as we looked at Q4, we were just looking more towards the top end of that guidance.

Speaker #1: We'll take our first question from Patrick Davitt with Autonomous Research. Please go ahead.

Speaker #1: So we've got a lot of growth in front of us. And I think that was indicative in Q2. And of course, raising in Q3.

Speaker #3: Hey, good evening, everyone. My first questions on the guidance. So you just beat the high end of your guided range for QQ. Be consistent, significantly.

Speaker #1: And we expect to see those same types of results that we would have in Q4, which would put us at the top end of the annual.

Speaker #4: Okay, fair enough. Thank you. And then my follow-up's on the interval fund. Finally got it launched, which is great to see. So I'd be curious to get your kind of updated thoughts on early take-up from advisors.

Speaker #3: And now guiding to a number above consensus in Q3, but keeping the full year guide at 1 to 105. So, through that lens, is there something you see in the pipeline that suggests a lower Q4 for some reason?

Speaker #4: You're already close to either a dynasty or manning. And to what extent there is a pipeline of more distribution platforms coming online in the future that your discussions with.

Speaker #3: Or are you just staying conservative? Thank you.

Speaker #2: Yeah, thank you for the question, Patrick. We were just staying conservative on the annual guide. We are looking towards the top end of that guide, which would put us in a really good position for Q4.

Speaker #4: Thanks.

Speaker #1: Yeah, see, interval fund is one of a kind. It took a significant amount of time to work through the SEC's process. But we're incredibly proud to have the product that we have out now.

Speaker #2: Just when we were targeting our guidance, we wanted to keep it closer to near term in Q3. And then as we looked at Q4, we were just looking more towards the top end of that guidance.

Speaker #1: We're working with very closely with custodians. We've held our board meetings. And we've engaged with a number of very large distribution i.e. RIA firms.

Speaker #1: Dynasty and Manning and others were certainly at the top of our list. But we've also got firms outside of those relationships that have been anxiously enthusiastically awaiting for the arrival of this product.

Speaker #2: So we've got a lot of growth in front of us. And I think that was indicative in Q2. And of course, raising in Q3.

Speaker #2: And we expect to see those same types of results that we would have in Q4, which would put us at the top end of the annual.

Speaker #1: It's essentially an uncorrelated yielding product in a time period where I think investors across the board are seeking these kinds of uncorrelated assets. And what's great about the interval fund is that it's not just for retail.

Speaker #3: Okay, fair enough. Thank you. And then my follow-up's on the interval fund. Finally got it launched, which is great to see. So I'd be curious to get your kind of updated thoughts on early take-up from advisors.

Speaker #1: This is we've been showing it to all of our pension fund clients that we already work with specifically through our mortality verification. And that's generated a significant amount of interest too.

Speaker #3: You're already close to either a dynasty or manning. And to what extent there is a pipeline of more distribution platforms coming online in the future that your discussions with.

Speaker #3: Thanks.

Speaker #1: So not just RIAs, but we're seeing this institutionally gather a lot of attention. And we expect to be taking assets in during Q3. And certainly Q4, I think, will be a very good quarter of new assets into the interval fund.

Speaker #2: Yeah, see, interval fund is one of a kind. It took a significant amount of time to work through the SEC's process, but we're incredibly proud to have the product that we have out now.

Speaker #2: We're working very closely with custodians. We've held our board meetings, and we've engaged with a number of very large distribution, i.e., RIA firms—Dynasty and Manning and others—where it's certainly the top of our list.

Speaker #4: Thanks.

Speaker #2: We'll turn now to Crispin Love with Piper Sandler. Please go ahead.

Speaker #5: Thank you, good afternoon. Appreciate taking the question. First, capital deployed very strong. I think nearly 200 million in the quarter. Can you share some of the drivers there of this quarter's deployment?

Speaker #2: But we've also got firms outside of those relationships that have been anxiously enthusiastically awaiting for the arrival of this product. It's essentially an uncorrelated yielding product in a time period where I think investors across the board are seeking these kinds of uncorrelated assets.

Speaker #5: And then just expectations going forward over the near term. I believe you've discussed a range of 130 to 150 million in the past. Does that still make sense?

Speaker #2: And what's great about the interval fund is that it's not just for retail. We've been showing it to all of our pension fund clients that we already work with, specifically through our mortality verification.

Speaker #5: Or could you see elevated quarters similar to the one that you saw this quarter?

Speaker #1: Sure. Thank you, Crispin. When we look at Q2, we always try to match capital deployed and origination to new capital in. And so we had another record Q2 in new capital into the longevity funds.

Speaker #2: And that's generated a significant amount of interest too. So not just RIAs, but we're seeing this institutionally gather a lot of attention. And we expect to be taking assets in during Q3.

Speaker #1: And so we wanted to make sure we put that money to work. And we had plenty of opportunity. One of the things that we're finding is that we still have excess demand for the underlying asset.

Speaker #2: And certainly Q4, I think, will be a very good quarter of new assets into the interval fund.

Speaker #3: Thanks.

Speaker #1: And I'll also highlight, we've spoken a lot about this over the last certainly few quarters in relation to a securitization. We think we're moving further down that process.

Speaker #1: We'll turn now to Crispin Love with Piper Sandler. Please go ahead.

Speaker #4: Thank you, good afternoon. Appreciate taking the question. First, capital deployed very strong. I think nearly 200 million in the quarter. Can you share some of the drivers there of this quarter's deployment?

Speaker #1: And if we are able to move forward with a securitization in Q3 or even early Q4, but targeting Q3, as we had said on the prior call, I think that we could comfortably see that capital deployed number increase above our initial target goal of 130 of 150 to that 150 to 175 range.

Speaker #4: And then just expectations going forward over the near term. I believe you've discussed a range of 130 to 150 million in the past. Does that still make sense?

Speaker #4: Or could you see elevated quarters similar to the one that you saw this quarter?

Speaker #2: Sure. Thank you, Crispin. When we look at Q2, we always try to match capital deployed and origination to new capital in. And so, we had another record Q2 in new capital into the longevity funds.

Speaker #1: And Q3, though, historically, has been a little bit seasonal in the sense of capital deployed and acquisitions. And then ramping up stronger in Q4.

Speaker #1: So we believe we're in a really good numbers increase from what we were anticipating 130 to 150, closer to 150 to 175. We had an exceptional Q2.

Speaker #2: And so we wanted to make sure we put that money to work. And we had plenty of opportunity. One of the things that we're finding is that we still have excess demand for the underlying asset.

Speaker #1: What I like to point out there is that if we have the capital that to matches the demand and we certainly have the origination and the inventory to match that.

Speaker #2: And I'll also highlight, we've spoken a lot about this over the last certainly few quarters in relationship to a securitization. We think we're moving further down that process.

Speaker #1: So very, very compelling. And takes us into what I think is going to finish out to be a pretty strong year.

Speaker #2: And if we are able to move forward with a securitization in Q3 or even early Q4, but targeting Q3, as we had said on the prior call, I think that we could comfortably see that capital deployed number increase above our initial target goal of 130 of 150 to that 150 to 175 range.

Speaker #5: Great. Thanks, Jay, for that. And then during the investor day also, during this call, a lot of talk about Life Arc. I know the platform's new.

Speaker #5: But can you share just the latest there beyond using it internally and with Manning and a peer? I'd assume kind of financial advisors, insurers are the key customers for the product.

Speaker #2: And Q3, though, historically has been a little bit seasonal, in the sense of capital deployed and acquisitions, and then ramping up stronger in Q4.

Speaker #5: Have you been able to start selling that yet? And then also curious just what the revenue model could look like. I assume it's subscription-based, cost per person.

Speaker #5: But just any color on pricing, potential targets there would be helpful. Thank you.

Speaker #2: So we believe we're in a really good spot. I think that we'll see those numbers increase from what we were anticipating 130 to 150, closer to 150 to 175.

Speaker #1: Thank you. Life Arc is a program that we've worked on for multiple years. And it is gaining significant traction. We were on Fox Business mornings with Maria this week, actually, talking about that program.

Speaker #2: We had an exceptional Q2. What I like to point out there is that if we have the capital that to that matches the demand and we certainly have the origination and the inventory to match that.

Speaker #1: And we received a pretty incredible response from individuals who wanted to kind of work through that program. We have a calculator online that they can utilize at Abacus Life Arc dot com.

Speaker #2: So very, very compelling. And takes us into what I think is going to finish out to be a pretty strong year.

Speaker #1: And what we have found is that there is a significant amount of direct outreach and then able to partner with Manning in real time.

Speaker #4: Great. Thanks, Jay, for that. And then during the investor day also, during this call, a lot of talk about Lifarq. I know the platform's new, but can you share just the latest there beyond using it internally and with manning and a peer?

Speaker #1: We have also had a significant amount of outreach from large RIA firms across the country. That would like to utilize this platform. And so the way that we are looking to monetize the platform is in more of a rev share model versus an individual life model.

Speaker #4: I'd assume kind of financial advisors, insurers are the key customers for the product. Have you been able to start selling that yet? And then also, I'm curious just what the revenue model could look like.

Speaker #4: I assume it's subscription-based, cost per person, but just any color on pricing, potential targets that would be helpful. Thank you.

Speaker #1: And in that process, we are in the negotiations with some firms as to kind of what that rev share model might look like. With that said, our primary focus with Life Arc is rolling this out within the Manning and a peer platform.

Speaker #2: Thank you. Lifarq is a program that we've worked on for multiple years. And it is gaining significant traction. We were on Fox Business mornings with Maria this week, actually, talking about that program.

Speaker #2: And we received a pretty incredible response from individuals who wanted to kind of work through that program. We have a calculator online. That they can utilize at Abacus Lifarq.com.

Speaker #1: And we're having a significant amount of success there. What we're finding is it's not just, as you might imagine, some smaller accounts here. We're talking about multi-million dollar accounts where people really want to understand this data better because the results are improving the amount of income that they're taking during retirement, plus the amount that they're leaving to their legacy.

Speaker #2: And what we have found is that there is a significant amount of direct outreach and then able to partner with manning in real time.

Speaker #1: And I've spoken a lot about this. But this is 124 trillion dollar market of generational wealth transfer in what it's really leading to is conversations with that next generation.

Speaker #2: We have also had a significant amount of outreach from large RIA firms across the country. That would like to utilize this platform. And so the way that we are looking to monetize the platform is in more of a rev share model versus an individual life model.

Speaker #1: So stay tuned. More to come. It's actually happening and moving very, very quickly. We received a significant amount of outreach from very large firms.

Speaker #1: And the model that we look at pricing this at would be a recurring revenue model in a rev share.

Speaker #2: And in that process, we are in the negotiations with some firms as to kind of what that rev share model might look like. With that said, our primary focus with Lifarq is rolling this out within the manning and the peer platform.

Speaker #5: Great. Did Treasury Secretary Besson reach out? You don't need to answer that.

Speaker #1: Oh, that's a great question. At this point, I don't know if I can talk about potential contacts. But I will tell you that we have been in contact with a variety of government agencies in relationship to what we're doing with Life Arc and mortality verification.

Speaker #2: And we're having a significant amount of success there. What we're finding is it's not just, as you might imagine, some smaller accounts here. We're talking about multi-million dollar accounts where people really want to understand this data better because the results are improving the amount of income that they're taking during retirement, plus the amount that they're leaving to their legacy.

Speaker #1: And I think it's just a matter of time before that program rolls out. I'll just touch on one thing. Hopefully, you notice this in the deck.

Speaker #2: And I've spoken a lot about this, but this is 124 trillion dollar market of generational wealth transfer in what it's really leading to is conversations with that next generation.

Speaker #1: We went from 4 million lives tracked to over 6 million quarter over quarter. I mean, just a massive quarter over quarter increase. From pension funds, insurance companies, et cetera.

Speaker #2: So stay tuned. More to come. It's actually happening and moving very, very quickly. We have received a significant amount of outreach from very large firms.

Speaker #1: So that program is really gaining traction.

Speaker #5: Great. Thank you, Jay. I appreciate the caller.

Speaker #2: And the model that we look at for pricing this would be a recurring revenue model with a rev share.

Speaker #1: Thank you.

Speaker #2: We'll turn now to Andrew Clearman with TD Kellan. Please go ahead.

Speaker #4: Great. Did Treasury Secretary Besson reach out? You don't need to answer that.

Speaker #6: Hey, good early evening. It's an interesting slide with the average realized gains coming in at 25% in the quarter. And it kind of made me think about where should we frame that?

Speaker #2: Oh, that's a great question. At this point, I don't know if I can talk about potential contacts, but I will tell you that we have been in contact with a variety of government agencies in relationship to what we're doing with Lifarq and mortality verification.

Speaker #6: I mean, it's been as high as 37, as low as 21. And then the second part to that question is around the landscape, the demand for your policies.

Speaker #2: And I think it's just a matter of time before that program rolls out. I'll just touch on one thing. Hopefully, you notice this in the deck.

Speaker #6: It seems pretty high. And then on the flip side, just the policies. So maybe you could talk about those pieces. And then ultimately, what kinds of gains to frame?

Speaker #2: We went from 4 million lives tracked to over 6 million quarter over quarter. I mean, just a massive quarter over quarter increase. From pension funds, insurance companies, et cetera.

Speaker #1: Sure. When we think about ROE, realized gains, and that's a gross realized gains number, I think that we did have an outlier Q3 last year at 37.

Speaker #2: So that program is really gaining traction.

Speaker #4: Great. Thank you, Jay. I appreciate the caller.

Speaker #2: Thank you.

Speaker #1: We'll turn now to Andrew Clearman with TD Callan. Please go ahead.

Speaker #1: And I think we identified that. I think historically, we've typically tracked in this 20 to 20 top in, 25% range. And we don't see any reason why that would change in the near term.

Speaker #5: Hey, good early evening. I guess an interesting slide with the average realized gains coming in at 25% in the quarter. And it kind of made me think about where should we frame that?

Speaker #1: I think we've put together a very long track record of what those realized gains kind of look like. And as we look into Q3 and Q4, one impact to that as we move along into 27 that I would look at is what's going to maintain those realized gains and maybe even expand them as we continue to have lower cost of capital?

Speaker #5: I mean, it's been as high as 37, as low as 21. And then the second part to that question is around the landscape, the demand for your policies.

Speaker #5: It seems pretty high. And then on the flip side, just the competition to buy policies. So maybe you could talk about those pieces. And then ultimately, what kind will gains to frame?

Speaker #1: And this touches your other question, Andrew, is that there's a couple of things that can impact that. If we see more success in securitizations or other lower cost of capital formats, then yes, you would see that realized gain maybe move up some.

Speaker #2: Sure. When we think about ROE, realized gains and that's a gross realized gains number, I think that we did have an outlier Q3 last year at 37.

Speaker #1: And then we could take a second look at maybe what our historical average has been. But we're still maintaining that historical average. And I think what's interesting is that then that ties into supply.

Speaker #2: And I think we identified that. I think historically, we've typically tracked in this 20 to 20 top in, 25% range. And we don't see any reason why that would change in the near term.

Speaker #1: And as we have potentially more competition driving interest in acquiring the contracts, I think what this really comes down to, though, is that we are the only publicly traded company in our entire industry.

Speaker #2: I think we've put together a very long track record of what those realized gains kind of look like. And as we look into Q3 and Q4, one impact to that as we move along into 27 that I would look at is that what's going to maintain those realized gains and maybe even expand them is we continue to have lower cost of capital.

Speaker #1: We are a large national institutional company that has a broad reach. And so what we're really talking about is what's the addressable market? If you think about it, this is we've spoken about this.

Speaker #1: 14 trillion of individual life insurance enforced, 90% of that, of which typically lapses. If you just break that down into what we think are addressable market is of the 14 trillion on an annual basis, annual, it's about 250 billion.

Speaker #2: And this touches on your other question, Andrew. There are a couple of things that can impact that. If we see more success in securitizations or other lower cost of capital formats, then yes, you would see that realized gain maybe move up some.

Speaker #1: I think it's an industry we're barely scratching 1.5% of that. So even if you do see some additional competition come in, we're just not anywhere near the lack of supply that we might find.

Speaker #2: And then we could take a second look at maybe what our historical average has been. But we're still maintaining that historical average, and I think what's interesting is that then that ties into supply.

Speaker #1: It's just a matter of then investing and expanding your resources and continuing to grow your origination footprint. And I'm less concerned about competition kind of coming in because there's so many policies for all of us still to acquire and gather.

Speaker #2: And as we have potentially more competition driving interest in acquiring the contracts, I think what this really comes down to, though, is that we are the only publicly traded company in our entire industry.

Speaker #1: So increased demand is here. It's here to stay as others have we've kind of become the alternative to some private credit options and people are looking and seeking for uncorrelated or less correlated yielding products now more than ever.

Speaker #2: We are a large national institutional company that has a broad reach. And so, what we're really talking about is: what's the addressable market? If you think about it—this is, we've spoken about this—$14 trillion of individual life insurance in force, 90% of which typically lapses.

Speaker #1: And Abacus is just in a great position to provide those products, provide those investments for people to invest in and participate in. And we have supply to fill that demand.

Speaker #2: If you just break that down into what we think our addressable market is, of the $14 trillion on an annual basis, it's about $250 billion annually.

Speaker #1: So we're just in a really good spot that's going to continue for not just a few quarters here, for the next several years.

Speaker #2: I think it's an industry where we're barely scratching one and a half percent of that. So, even if you do see some additional competition come in, we're just not anywhere near the lack of supply that we might find.

Speaker #6: That sounds very attractive. Manning and Napier, so it feels like very early innings still, right? Because it was May of 2016 deal. So it sounds like the runway is on the come.

Speaker #2: It's just a matter of then investing and expanding your resources and continuing to grow your origination footprint. And I'm less concerned about competition kind of coming in because there's so many policies for all of us still to acquire and gather.

Speaker #6: But from your prepared remarks, you seemed very excited. And then you talked a little bit about partnerships. But is it more beneficial to kind of take these equity stakes, like you did with Manning and Napier, as opposed to just doing a pure revenue share as you were discussing?

Speaker #2: So, increased demand is here; it's here to stay. As others have, we've kind of become the alternative to some private credit options, and people are looking and seeking uncorrelated or less correlated yielding products now more than ever.

Speaker #6: And with this, are there more Manning and Napier's out there?

Speaker #2: And Abacus is just in a great position to provide those products, provide those investments for people to invest in and participate in. And we have supply to fill that demand.

Speaker #1: Yeah. Manning and Napier is a great firm. And we think incredibly highly of them. We spent the last few months working through integrations of our strategic alliance.

Speaker #1: And that has proven to be successful and growing. And before we take a look at other firms, we wanted to ensure that the investment that we have in this one is something that is going to generate revenue in the synergies that we're talking about exist and that we can grow and then replicate in other areas of the country.

Speaker #2: So we're just in a really good spot that's going to continue for not just the few quarters here, for the next several years.

Speaker #5: That sounds very attractive. Manning & Napier—so it feels like it's still very early innings, right? Because it was a May 2016 deal. So it sounds like the runway is still to come.

Speaker #1: And what we have found, at least initially here, is that all those things hold true. And we are incredibly excited about Manning and Napier as a firm, as a company, their people are incredible.

Speaker #5: But from your prepared remarks, you seem very excited. And then you talked a little bit about partnerships. But is it more beneficial to take these equity stakes, like you did with Manning & Napier, as opposed to just doing a pure revenue share, as you were discussing?

Speaker #1: And that is the type of business that we think that we can even be very additive to in growth with Legion, Lifarq, and investment products.

Speaker #5: And with this, are there more Manning & Napier's out there?

Speaker #1: And so logically, as we look across the country, yes, there are additional opportunities that if we can find similar synergies with, I think is going to have a massive impact on the RIA industry in general.

Speaker #2: Yeah. Manning and Napier is a great firm. And we think incredibly highly of them. We've spent the last few months working through integrations of our strategic alliance.

Speaker #2: And that has proven to be successful and growing. Before we take a look at other firms, we wanted to ensure that the investment that we have in this one is something that is going to generate revenue, that the synergies we're talking about exist, and that we can grow and then replicate in other areas of the country.

Speaker #1: But when we think about our distribution channel and how we continue to distribute our own products, source policies, those Manning and Napier firms like them are incredibly appealing.

Speaker #6: Got it. Thank you.

Speaker #2: We'll turn next to Timothy D'Agostino with B. Riley Securities. Please go ahead.

Speaker #7: Yeah. Hi. Thanks for taking the questions. On the path to $5 billion plus of AUM by year-end '26, I guess, could you kind of help bridge the gap of where you are today to getting to that goal?

Speaker #2: And what we have found, at least initially here, is that all those things hold true. And we are incredibly excited about Manning & Napier as a firm, as a company—their people are incredible.

Speaker #2: And that is a type of business that we think we can be very additive to in growth with Legion, Lifarq, and investment products.

Speaker #7: And kind of is a lot of that coming through the longevity fund? Thank you.

Speaker #1: Sure. Thank you. Fair question. And it is coming through longevity funds. It's also coming through as we've talked about some new products. The interval fund will be I think a significant contributor to that asset growth.

Speaker #2: And so logically, as we look across the country, yes, there are additional opportunities that, if we can find similar synergies with, I think are going to have a massive impact on the RIA industry in general.

Speaker #1: I think that as we look at our $5 billion target, and then you compare that to where we sit with earnings, we're tracking. And in both areas.

Speaker #2: But when we think about our distribution channel and how we continue to distribute our own products, source policies, those Manning & Napier and firms like them are incredibly appealing.

Speaker #1: And I think that's really the compelling part of this story is we're diversifying a lot of our revenue, but we're not taking away from the other.

Speaker #5: Got it. Thank you.

Speaker #1: And this is really what I want to hit home here. Is that when you look at the life solutions business, that life solutions single year.

Speaker #1: We'll turn next to Timothy DeAgostino with B. Riley Securities. Please go ahead.

Speaker #3: Yeah. Hi. Thanks for taking the questions. On the path to $5 billion plus of AUM by year-end '26, I guess, could you kind of help bridge the gap of where you are today to getting to that goal?

Speaker #1: And then the asset management business is additive to that. And so when we think about things like our consensus for year-end, our guidance for year-end, we certainly want to be and believe we'll be at the top end of all those numbers.

Speaker #3: And kind of is a lot of that coming through the longevity fund? Thank you.

Speaker #1: Driven by the fact that we're adding $5 billion potentially here or, sorry, a total target of $5 billion in AUM. But even without that, we're still doing quite well in life solutions and the other parts of our business because for me, it's not only about growing ANI and EBITDA, but beyond that, it's about multiple expansion.

Speaker #2: Sure. Thank you. Fair question. And it is coming through longevity funds. It's also coming through, as we've talked about, some new products. The interval fund will be, I think, a significant contributor to that asset growth.

Speaker #2: I think that as we look at our $5 billion target, and then you compare that to where we sit with earnings, we're tracking. And in both areas.

Speaker #1: And that's really what we're talking about here is that people investors will look at this story and say, "Oh, wow. Okay. Look at this recurring revenue story driven by additional assets under management.

Speaker #2: And I think that's really the compelling part of this story is we're diversifying a lot of our revenue, but we're not taking away from the other.

Speaker #1: We shouldn't be trading at single digit or low double digit multiples. We should be trading closer to our peer group in the mid-teens."

Speaker #2: And this is really what I want to hit home here: when you look at the Life Solutions business, that Life Solutions business continues to grow every single year.

Speaker #7: Okay. Great. Thank you. And then just another one that's on that same slide. Regarding the 3 million for technology revenue, obviously, about 0.8 million for the first half, just trying to understand how you get to 3 million.

Speaker #2: And then the asset management business is additive to that. So, when we think about things like our consensus for year-end, our guidance for year-end, we certainly want to be—and believe we'll be—at the top end of all those numbers.

Speaker #7: Is there is anything of Lifarq involved in that? Just trying to put that together. Thank you.

Speaker #2: Driven by the fact that we're adding $5 billion potentially here—or, sorry, a total target of $5 billion in AUM. But even without that, we're still doing quite well in Life Solutions and the other parts of our business.

Speaker #1: Thank you. Yes. We will be adding Lifarq revenue here in the near terms program we just rolled out a month ago. But what we're seeing on the tech revenue and the subscription revenue in relationship to our mortality verification, the way those contracts are structured is that they increase in revenue.

Speaker #2: Because for me, it's not only about growing ANI and EBITDA, but beyond that, it's about multiple expansion. And that's really what we're talking about here, is that people—investors—will look at this story and say, "Oh, wow."

Speaker #1: As time goes, so year two revenue is higher than year three and then year one and then year three grows. And a lot of these are three and five-year contracts.

Speaker #2: Okay. Look at this recurring revenue story driven by additional assets under management. We shouldn't be trading at single-digit or low double-digit multiples.

Speaker #1: So you'll see that revenue continue to grow just where the underlying contracts and how they're scheduled. Initially, when you bring on a new client, you're at a lower cost, and then you step into higher revenue as you get into two, three, four, and five.

Speaker #2: We should be trading closer to our peer group, in the mid-teens.

Speaker #3: All right. Great. Thank you. And then just another one that's on that same slide. Regarding the 3 million for technology revenue, obviously, about 0.8 million for the first half.

Speaker #1: So that's where that's projected out. And so we have I would say forecasted embedded revenue in those in contracts that we already have signed.

Speaker #3: Just trying to understand how you get to $3 million. Is there anything of Lifarq involved in that? Just trying to put that together.

Speaker #1: And it does not necessarily include yet the revenue that we believe we'll see from Lifarq. And what's amazing about the Lifarq revenue is that that's going to be super interesting because it's also going to help us in our private wealth channel.

Speaker #3: Thank you.

Speaker #2: Thank you. Yes. We will be adding Lifarq revenue here in the near term as a program we just rolled out a month ago. But what we're seeing on the tech revenue and the subscription revenue in relationship to our mortality verification, the way those contracts are structured is that they increase in revenue as time goes.

Speaker #1: So as we're increasing our assets under management in relationship to private wealth, Lifarq is a driver for that because it's providing a service and platform that are bringing people into our private wealth business and driving more recurring revenue.

Speaker #2: So year two revenue is higher than year three and then year one and then year three grows. And a lot of these are three and five-year contracts.

Speaker #7: Okay. Great. Thank you so much for taking the questions.

Speaker #2: So you'll see that revenue continue to grow just where the underlying contracts and how they're scheduled. Initially, when you bring on a new client, you're at a lower cost and then you step into higher revenue as you get into two, three, four, and five.

Speaker #2: We'll go next to Randy Benner with Texas Capital. Please go ahead.

Speaker #8: Hey. Thanks. Yeah. I still have a couple here. So on the asset management results for the quarter, I think they came in below street expectations.

Speaker #2: So that's where that's projected out. And so we have, I would say, forecasted embedded revenue in those—in contracts that we already have signed.

Speaker #8: And from the balance of the commentary in the Q&A here, it sounds like that's going to snap back to good growth. But can you explain a little bit more kind of what drove the lower than expected revenue in the quarter?

Speaker #2: And it does not necessarily include yet the revenue that we believe we'll see from Lifarq. And what's amazing about the Lifarq revenue is that that's going to be super interesting because it's also going to help us in our private wealth channel.

Speaker #8: And in that, was the fee rate on AUM also a little bit lower than expected this quarter?

Speaker #2: So, as we're increasing our assets under management in relation to private wealth, Lifarq is a driver for that because it's providing a service and platform that are bringing people into our private wealth business and driving more recurring revenue.

Speaker #1: Yeah. I think the impact there was just driven by ETFs. And there's an ETF business in itself isn't a wide margin business. But you've seen some rotation out of those ETFs, which is what impacted some of the asset management revenue.

Speaker #3: Okay, great. Thank you so much for taking the questions.

Speaker #1: But on the life solutions or excuse me, the longevity asset side, that revenue was doing quite well. So in any given quarter, we might see some rotation of that asset management revenue as we continue to increase and shift this into more fee-related earnings.

Speaker #1: We'll go next to Randy Benner with Texas Capital. Please go ahead.

Speaker #4: Hey. Thanks. Yeah. I still have a couple here. So on the asset management results for the quarter, I think they came in below street expectations.

Speaker #4: And from the balance of the commentary in the Q&A here, it sounds like that's going to snap back to good growth. But can you explain a little bit more, kind of, what drove the lower-than-expected revenue in the quarter?

Speaker #1: But there wasn't anything from our perspective, we looked at it and we're like, "Yeah. Okay. It makes sense that ETFs saw some shifts just in different types of assets." And that would have impacted slightly the overall asset management revenue.

Speaker #4: And in that, was the fee rate on AUM also a little bit lower than expected this quarter?

Speaker #1: But when you look at the longer-term revenue in relationship to this, specifically some of our private funds and now rolling into our interval fund and other products, I think that reconciles very, very quickly.

Speaker #2: Yeah, I think the impact there was just driven by ETFs, and ETF business in itself isn't a wide margin business. But you've seen some rotation out of those ETFs, which is what impacted some of the asset management revenue.

Speaker #1: And also kind of shifts more towards consistent growth of revenue there.

Speaker #7: Okay. And so the fee is on AUM for related parties should normalize a little bit higher maybe than what we saw this quarter as we look forward to the model.

Speaker #2: But on the life solutions—or, excuse me, the longevity asset side—that revenue was doing quite well. So in any given quarter, we might see some rotation of that asset management revenue as we continue to increase and shift this into more fee-related earnings.

Speaker #1: Yes. That's correct.

Speaker #7: Okay. Great. Thanks. And then just one I think housekeeping item, but the tax rate was a little bit higher this quarter it's not outside of the range you see kind of looking back a few quarters.

Speaker #7: But was that unusual? Does that have any implication on kind of the tax rate for the rest of the year?

Speaker #2: But there wasn't anything from our perspective, we looked at it and we're like, "Yeah. Okay. It makes sense that the ETFs saw some shifts just in different types of assets." And that would have impacted slightly the overall asset management revenue.

Speaker #1: Yeah. Hey, Randy. You'll see that normalize on an annual basis. But in the quarter, agreed, it was higher than what we typically see. And that was driven by a couple of items specifically around 162M and then an interest deduction.

Speaker #2: But when you look at the longer-term revenue in relationship to this, specifically some of our private funds, and now rolling into our interval fund and other products, I think that reconciles very, very quickly.

Speaker #1: So but you'll see that normalize towards our historical rate for the year.

Speaker #2: And also kind of shifts more towards consistent growth of revenue there.

Speaker #7: Okay. And Bill, is that because it was a little higher in the first quarter, I think, too. So is it for the full year, it's around 30% or is it lower than that?

Speaker #4: Okay. And so the fee on AUM for related parties should normalize a little bit higher, maybe, than what we saw this quarter as we look forward in the model.

Speaker #1: It should be a little bit lower than that.

Speaker #7: Okay. Great. Thanks. Appreciate it.

Speaker #2: Yeah. Yes. That's correct.

Speaker #4: Okay. Great. Thanks. And then just one I think housekeeping item, but the tax rate was a little bit higher this quarter it's not outside of the range you see kind of looking back a few quarters, but was that unusual?

Speaker #1: Sure. Thank you, Randy.

Speaker #2: As a reminder, ladies and gentlemen, if you would like to ask a question, please press star one. We'll hear next from Dimitri Primashov with Freedom Broker.

Speaker #2: Please go ahead.

Speaker #4: Does that have any implication on kind of the tax rate for the rest of the year?

Speaker #9: Hi. Good evening. So I just wanted to clarify regarding the dividends should we expect to continue dividends at the current level going further? Thank you.

Speaker #2: Yeah. Hey, Randy. You'll see that normalize on an annual basis. But in the quarter, agreed, it was higher than what we typically see. And that was driven by a couple of items specifically around 162M and then an interest deduction.

Speaker #2: So but you'll see that normalize towards our historical rate for the year.

Speaker #1: I apologize. I didn't catch part of your question. Were you asking about the dividends?

Speaker #9: Yes. Should we expect the dividends at current levels going forward?

Speaker #4: Okay. And Bill, is that because it was a little higher in the first quarter, I think too. So is 30% or is it lower than that?

Speaker #1: Oh, I see.

Speaker #9: Yeah. So we pay an annual dividend, and the way that if you look at kind of how we measure our dividend numbers, which is held up against as a percent of our fee-related earnings, and then as a percent of our adjusted net income.

Speaker #2: It should be a little bit lower than that.

Speaker #4: Okay. Great. Thanks. Appreciate it.

Speaker #2: Sure. Thank you, Randy.

Speaker #9: If we use the similar path or a similar calculation in 2026, what that would mean is that, yes, you would see a increase in the dividend in for 2026.

Speaker #1: As a reminder, ladies and gentlemen, if you would like to ask a question, please press star one. We'll hear next from Dimitri Primashov with Freedom Broker.

Speaker #1: Please go ahead.

Speaker #5: Hi, good evening. I just wanted to clarify regarding the dividends: should we expect to continue dividends at the current level going forward? Thank you.

Speaker #9: We don't have that final calculation number yet, but based upon what we're seeing here, yes, you would see a percentage increase in relationship to the dividend this year.

Speaker #9: Thank you very much. Very helpful.

Speaker #2: I apologize. I didn't catch part of your question. Were you asking about the dividends?

Speaker #1: Of course. Thank you.

Speaker #2: And as there appear to be no additional questions at this time, I'd like to turn the floor back over to Jay Jackson for any additional or closing comments.

Speaker #5: Yes. Should we expect the dividends at current levels going forward?

Speaker #2: Oh, I see.

Speaker #4: Yeah. So we pay an annual

Speaker #1: Thank you, everyone, once again. And really appreciate everyone joining the call. We had a very successful investor day. And again, I want to thank everybody who made that trip out.

Speaker #2: Dividend, and the way that, if you look at how we measure our dividend numbers, which is held up against as a percent of our fee-related earnings.

Speaker #1: And one of the highlights we spoke about is that Abacus is utilizing our data in a way that to address what we believe to be one of the largest and most significant generational wealth transfers that will ever be seen.

Speaker #2: And then, as a percent of our adjusted net income, if we use a similar path or a similar calculation in 2026, what that would mean is that, yes, you would see an increase in the dividend in 2026.

Speaker #1: And that 124 trillion dollars in using our data to capitalize on that, when you when we look back on where we are today to where we're going, I truly believe that we are the leader in this specific piece of this generational wealth transfer.

Speaker #2: We don't have that final calculation number yet, but based on what we're seeing here, yes, you would see a percentage increase in relation to the dividend this year.

Speaker #1: And as we continue to monetize it, Abacus is growing into the ability to be able to put a commodity and a price on time and there's nothing more valuable than that.

Speaker #4: Thank you very much. Very helpful.

Speaker #2: Of course. Thank you.

Speaker #1: And as there appear to be no additional questions at this time, I'd like to turn the floor back over to Jay Jackson for any additional or closing comments.

Speaker #1: And we are excited for you to see how we continue to grow our journey and be additive to our entire flywheel. So thank you.

Speaker #2: Thank you, everyone, once again. And really appreciate everyone joining the call. We had a very successful investor day. And again, I want to thank everybody who made that trip out.

Speaker #1: And we look forward to Q3.

Speaker #2: Ladies and gentlemen, that will conclude today's event. Thank you for your participation. You may disconnect at this time, and have a wonderful rest of your day.

Speaker #2: And one of the highlights we spoke about is that Abacus is utilizing our data in a way to address what we believe to be one of the largest and most significant generational wealth transfers that will ever be seen.

Speaker #2: And that 124 trillion dollars in using our data to capitalize on that. When you when we look back on where we are today to where we're going, I truly believe that we are the leader in this specific piece of this generational wealth transfer and as we continue to monetize it, Abacus is growing into the ability to be able to put a commodity and a price on time and there's nothing more valuable than that.

Speaker #2: And we are excited for you to see how we continue to grow our journey and be additive to our entire flywheel. So, thank you.

Speaker #2: And we look forward to Q3.

Speaker #1: Ladies and gentlemen, that will conclude today's event. Thank you for your participation. You may disconnect at this time. And have a wonderful rest of your day.