As COVID-19 continues to impact everyday life, GWG Holdings expressed its confidence in the strength of the company’s portfolio of investments that support the L Bonds and Redeemable Preferred Stock it has sold to investors across the U.S. for more than 10 years.
GWGH and its subsidiary, The Beneficient Company Group, L.P. (Ben), are prioritizing the continuity of their operations, the health and safety of their employees, and their commitment to their business partners and investors.
“While public markets have been increasingly volatile, we believe our L Bonds and Redeemable Preferred Stock continue to be a valuable addition to an investor portfolio, particularly in the current economic climate,” said GWGH Chief Executive Officer Murray Holland. “Our L Bonds and Redeemable Preferred Stock are not publicly traded, so investors aren’t exposed to daily volatility in the price of their investment, and they are structured to provide regular, fixed interest or dividend payments, as well as repayment of principal upon maturity for L Bonds, or the investor’s original investment returned upon redemption of the Redeemable Preferred Stock.”
As of June 30, 2020, the date of the last 10-Q filed by GWGH with the SEC, GWG Life, a wholly-owned subsidiary of GWGH, owned a $1.96 billion face value portfolio of life insurance policies. Life settlement mortality performance is not correlated to public or private market performance or any other asset. The GWG Life portfolio of 1,102 policies represented insured individuals who had an average age of 83 years and contained policies of 88 high-quality insurance carriers with over 96.3 percent of the face value of benefits issued by insurers having an investment-grade rating (BBB or better) by Standard & Poor’s.
Ben’s loan portfolio diversification may help to provide stability to the portfolio during current market conditions.
Ben’s loan portfolio had exposure to 120 professionally managed alternative investment funds, comprised of 350 underlying investments. And, approximately 87 percent of Ben’s loan portfolio was backed by investments in private companies.
Ben’s loan portfolio diversification spans across these industry sectors:
Ben’s loan portfolio had little exposure to companies in the leisure, travel or gaming industries or firms engaged in oil and gas exploration, production, storage and transportation. Also, healthcare investments – both in Healthcare Equipment & Services, and Pharma, Biotech & Life Sciences – represented approximately 44 percent of the Ben loan portfolio. Given a health-related crisis such as the COVID-19 pandemic, some of these companies may see increased demand for their products and services as a result of this crisis.
It is important to note, however, we cannot give any assurances that the consequences of this crisis will not adversely affect the value of Ben’s loan portfolio, particularly given the rapidly changing nature of the crisis, the companies and industries most impacted, and related governmental responses.
“While the impact of a long-term significant global market downturn on our company and portfolio is somewhat unpredictable, we believe our portfolio of life insurance policies in conjunction with Ben’s diversified loan portfolio positions us to withstand periods of volatility and negative performance in the stock and bond markets,” said Brad Heppner, the GWGH and Ben Chairman of the Board and Ben’s Chief Executive Officer.