Abacus Global Management Inc Aktie

It's my pleasure to welcome Abacus Management's Chairman and CEO, Jay Jackson. Jay, thanks for joining us this morning.

Yes, excited. Thank you.

Perhaps to start for investors that might not be as close to your story in this world, I think it would be helpful to get a quick overview of what Life Settlements is, your position in that market and why you think it's such a compelling asset class for investors.

Sure. It's super interesting asset. And one thing to really take into consideration is where Abacus sits in this process is that we're the origination company, the market maker of the asset. This is a highly regulated asset where we're licensed in nearly every state that requires it. We're regulated by the state's insurance department. And to source the asset, we typically source these from financial advisers, potentially their insurance agents and/or the policyholder themselves. And this is really just about an information campaign. It's really what it comes down to. We educate people that their life insurance policy is actually personal property as set forth by the Supreme Court over 100 years ago.

There's $14 trillion of life insurance assets in force today. 90% of those assets will not pay a claim. And not because the insurance company has done anything nefarious. It's just that the way traditionally people have used their life insurance policy is that they use it for a certain amount of time, their kids age, their family grows up, they don't really need it anymore and then they simply just return it back to the carrier by stop making payments. What Abacus does is step into that process and says, wait a minute, it's personal property. What's the net present value of that contract today?

So if you're 80 years old, you have a $1 million life insurance policy you've been paying into, that net present value could be as high as $300,000 or $400,000, and we do that by helping them better understand how much more time they have in that contract. That's the solve for NPV. And we aggregate their medical files. We receive their signed HIPAA through the medical files. We use an extensive amount of data to help establish what their mortality outcome most probabilistically looks like by actual mortalities that have occurred based upon the same medical profile that they have.

So in a nutshell, where Abacus sits in this is you look at our flywheel, the core of this is that we're an origination and market maker company that also asset manages the business. We sell the data and technology. We capitalize on that through our Abacus Intel. And then now we're taking that and moving that into private wealth and wealth management because we create so much wealth for our clients. Like we'll pay out nearly $0.25 billion in new capital to people in retirement. And then how is that liquidity ultimately going to get allocated. We want to make sure that we can kind of monetize that into our own fee structure.

And you talked a lot about how it's compelling for the investors selling you their life policies. How is it compelling for investors that are investing in your products and securitizations as we're about it evolving to be more of a third-party business?

Absolutely. And the institutional interest in this asset has really grown significantly over the last decade. And in the last 2 or 3 years, it's really grown. And I would even argue the last year, we've seen some volatility in private credit type products. What makes this asset so unique are the 3 -- here's 3 unique qualities. One is that it's typically -- if it's a form of credit, it's issued by an A-rated carrier that has a default ratio of near 0 over the last 100 years. So you've got a very high creditworthy type of counterparty here that has cash reserved regulatory against that contract.

So now it's going, okay, typically, those contracts would trade at a much lower type of yield, but because there's some volatility around understanding the longevity of the contract, that volatility creates a higher yield profile. But in addition to that, creates a very little correlation, a very low correlation to the other markets. I mean if you think about it, the example I just laid out, you have an 80-year-old who's going to sell this contract for, let's say, $300,000 or $400,000. Ultimately, every year, this contract becomes more valuable. It's like kind of like a mortality-driven 0 coupon.

As you get closer to par, right, driven by the mortality, that's what drives your returns. And therefore, if you have market volatility, it's not subject to traditional interest rate volatility, bond volatility or equity market volatility. So here, you've got this kind of lower correlated or uncorrelated yielding products in the high to low-single digits that is effectively an A-rated piece of paper. And the issue from institutional investors isn't the underlying investment. It's instead how do they get it. And that's where Abacus sits. And we've been working really hard in building structured products to gain them access in a much more simplified format like a securitization.

Great. That's helpful. So you recently had a great Investor Day in July and kind of framed the story in a way that asked investors to stop viewing Abacus as a life settlement transactional business, trading business instead see it as infrastructure for "lifespan-linked finance." What are the externally measurable milestones you're looking to and we should be looking to over the next 1 or 2 years to prove that reframing?

For sure, because it's important to note, here's what we're not. We're not an insurance company. We don't issue policies. We're an alt asset manager. And traditionally, we had taken our tranche of assets, let's say, our portfolio, our balance sheet and sold those to third-party asset managers. It logically made sense to convert that into fee-related earnings through our own asset management. We've grown from $50 million AUM to over $3.5 billion AUM just in the last 3 years. That's the demand. Just in the last 12 months, it's almost $1.5 billion in new AUM has come into this asset and specifically through us. And so that reframing is happening actually in real time. And it wasn't something that we said, gosh, we hope this works out. This is what we're trying to do.

It was based upon what was actually happening. And when you think about the financial infrastructure that we're creating, one, we're creating financial infrastructure related to unique products like securitizations that I'm sure we'll talk more about, but you've got an asset in high demand. right? There's several billion dollars trying to chase the asset, and they're just having a hard time getting it. But then the other piece that I don't want to underscore here that is super important is the data. Think about the data I just collected on Mr. Jones, all of his medical files, his history, mortality history of everyone just like him and then capitalizing on that longevity data to produce products that's usable in financial planning, one, right?

If the #1 fear is running out of money in retirement, shouldn't we think about addressing that fear by telling people how long they're going to be in retirement. We have the unique data set to support that. And then secondly, we currently sell and monetize a lot of that data to some of the largest pension funds in the United States. Some of our largest clients are literally the largest pension funds in the United States who source our mortality data and soon to be some of our lifespan-based data so that they can enhance their outcomes. Our premise is if I've just paid you $0.5 million for your life insurance policy, you should invest like the pension fund. Stay in equities longer, be in alts, be able to utilize that because you can do that allocation based upon having the information on how long you're going to be there.

And the most important piece, how do we monetize? What does that monetization actually look like? And we laid out a plan over the next 5 years to get to 70% fee-related earnings. That is not because we're going to see a decrease in origination. That's instead in addition to what we're currently doing. Our origination and market maker business grows at about 20% per year. If we do nothing, we'll get pretty close to hitting our 3-year target, even if we don't diversify all the revenue, right? Like we'll go from -- I think consensus is north of $150 million this year and targeting $250 million over the next 3 years or 2 years out.

We'll get there alone just on that. But if you think about what we're adding, right, we've seen a significant increase in AUM. We are monetizing our data already to now millions of people that we track mortalities for in pensions. And when we think about the asset management piece on financial advisers, this is a tool that we're looking at monetizing in a way that we would charge a fee against all their assets just to have access to the tool. So I'm not here to compete with RIAs. I'm here to provide financial infrastructure for them so that they can help their clients make more informed investment decisions. Will we have internal RIA products? Have we made a minority allocation into Manning & Napier, which is a multibillion-dollar asset manager?

Of course, we have. And we're going to launch that product directly on their platform right away. However, we're also going to add this as a monetization product and think about it, this should be available to trillions of dollars here. And if you're making a single-digit 5-plus basis points per dollar on that, you're doing really, really well on $1 trillion. And I think that's the scale and scope we see here. I think that in the end, 5 years out, we've underestimated what we could be.

So you kind of touched on my next question a little bit, this idea that you're moving to 70% recurring from 16% recurring now, obviously, seeing a strong trajectory in the AUM growth. What is your definition of recurring? And how should we think about the balance of that 70% between asset, wealth management, this new 5 kind of basis point per dollar you're talking about?

Sure. The way that I look at recurring revenue for us is not unlike any traditional alternative asset manager you see. Certainly, fee-related earnings related to management fees. One of the things, unique things that we also have, though, is servicing fees. So if you think about securitization, we retain servicing fees, which has the same qualities as a management fee, right? Like it's the same type of annual fee that you're charging on those underlying assets that we're able to pick up because we have several different verticals within that same product line.

The other way that we look at it is that we just highlight, if we think about the asset management fee for financial advisory, because we do have our own funds, we have ETFs that we'll be rolling out, we'll be able to acknowledge and pick up some of those fees there. Abacus Intel is a separate vehicle. And what we typically do when we sign up clients there, those are 3- and 5-year contracts. This isn't, oh, hey, it's a monthly contract on a per life basis, yes, but these are 3- and 5-year contracts that graduate fee increases over time. The same thing will happen when we're providing this lifespan-based financial planning data to some of the largest RIAs in the country.

And I can tell you where we haven't been able to officially announce the names of these firms yet, but we've already got 2 agreements done with financial firms. And so they are going to be using LifeARC, applying this and more to come, right? We are receiving inquiries on a daily basis where large RIAs across the country, some of the largest out there want to use this platform so that they can enhance their own clients' outcomes.

And is that -- that would be the 5 basis points you're talking about? Or is that illustrative?

Yes. And there's 2 ways -- yes, there's 2 ways to think about that. There's the 5 basis points where this is just their current clients, right? And if you think about it, they have tens of billions in assets under management that are going to now capitalize on this program. It will be like a scaling model. It might start lower and then scale back up. And then we generate so many new inquiries, leads, payouts we work with. And in those cases, a little bit different, right? These are our clients. We might -- we'll have an internal RIA team that will work with them specifically on how they can best meet those allocations.

And potentially, as they graduate into maybe larger platforms, ultra, ultra-high net worth, we've got some clients that have reached out to us that have north of $100 million of net worth that want to work with us on their allocation, capitalizing on lifespan-based financial planning, where we've taken them through LifeARC, shown them how they can improve their outcomes, like some with $100 million, they're less concerned about their retirement income and they're more concerned about their growth and how they allocate. And then how can they distribute that to the next generation.

And then we're sitting down with their next generation and helping the next-generation plan because when you have an ultra-high net worth, you know what the next generation really wants to know? When they're going to inherit the wealth. And this actually really helps them do this. And our campaign is normalizing that conversation because that is one issue is getting people comfortable with the idea that says, hey, mom and dad are at 120 months. And 120 months is effectively 10 years. We tend to not talk in years. We tend to talk in months because it makes people understand how much time they really do have, which is a lot. right?

One of the first pieces of campaign, I'll be putting my number out. My number is 408 months. And my gosh, if I make it, my family will probably be sick of me, but that's my target. And that's probably where I'm going to land at. And if I plan to that, I appreciate where I'm at in my own process much better, right? Like I appreciate time, I appreciate my investments. And I'm going to focus on my health if I have a better understanding of what it is.

That's helpful. And I imagine this is obviously a nice kind of Trojan Horse into introducing your asset management products to the RIAs, yes.

Right. And so as we gain those contracts into those RIAs, naturally, we're asking them to take a look at distribution agreements for our own funds, including our interval fund.

Yes. All right. On that, let's move to kind of some news last couple of weeks, got a nice proof of concept on the viability of life settlements as a more scaled institutional asset class with your closing of a $400 million securitization. I think that was 8x larger than the first one you did last year. How would you frame the makeup of the investor base there, the demand, the process of getting that out? Because I think it took a little bit longer than we were thinking. And then how should we think about it being a more consistent AUM contributor now that it's getting more scale?

Yes. I think we had focused specifically on this kind of what I would call our new distribution channel, i.e., the securitization channel. And we had spent a lot of time trying to educate our shareholders and you on the impact this would have in a positive way. I think everyone appreciates and understands the impact this has on an institutional basis, right? You have consistent capital, it's rated. It means that the access to institutions to be able to invest into the asset broadens who can invest and what part of their own investment book that they might invest through. So broadens it to pension funds, broadens it to insurance companies, broadens that investment pool to very large private asset managers.

Where we had initial work through was with the rating agency and without saying who it is because it was a private deal technically, it was one of the large rating agencies. It's almost like I can tell you who it wasn't. And it was not one of the smaller ones that has other issues. This was one of the larger rating agencies that does these deals on a regular basis. And to get investment grade and better on the underlying asset was a true test to the structure of what this was. And that took us almost 7 months. And we had to run so many iterations of the underlying portfolio to provide comfort around extension risk.

And the extension risk was related to ultimately a lifespan extension. And how do you get comfortable with you have a little bit of a moving target -- and we had to do things like improvements related to understanding what that extension risk was and having additional cash reserve there to ensure that there was a lot of comfort from both the rating agency and the investors. The result of that ultimately was a securitization that had some of the most well-known and largest investors that any of us would check a box and some names you cover. So it was those types of groups.

I figured.

Yes. And so -- and also what I was very pleased with large insurance companies came in. I mean the largest. And ultimately, what happened was that this was an A, B tranche. They had an A tranche and a B tranche. Both tranches were rated investment grade or better, of course. And what was really impressive to me, which really spoke to the structure and the demand, the securitization was 2x oversold. I mean, oversubscribed. We had to go back to those large asset managers. And Patrick, you know this better than everyone, like when you go back to them, they're not upset, but they're not happy that, hey, we're cutting your allocation back.

But what a great story, right? We also upsized the deal because it was oversubscribed. We upsized, which was a pleasant surprise. And now we're preparing ultimately for the next one. I think our intent is to not flood the market. You want to flood the market, but our intent is to do this probably 3 times a year. And we'll set some of those targets out on our Q3 call, but it's going to have a material impact to the amount of capital that we're raising. I mean, I think that if this should put us on track on a regular basis to be raising new capital between $800 million and $1 billion a year pretty consistently because size and scale here, yes, they might not all be $400 million, some might be slightly smaller in that range. But to have those level of institutional investors, they don't like to do really small deals.

So they need to know they have allocations on a go-forward basis. So if we're looking at similar size, maybe some smaller, some larger, depending on the time of year, and then we're looking at doing 3 of those a year, you can quickly map out the impact that this has. And as a cost of capital, it's only going to get better as you do more, right? The first one, you run a little skinny and then the next one is you just kind of continually see that improvement as there's a lot more comfort in the market.

And you've done -- I assume you've done the heavy lifting with the rating agencies. So...

Yes. Now it's -- we'd like to think it's rinse and repeat, you never know. But it's -- you have certainly a map now of exactly the types of contracts that fit, what types of shareholders are going to -- what they're going to want to see and most importantly, the documents in the platform. So that is now well established. And that's why when we're looking on a go-forward basis, we're like, look, like we would target doing another one in Q1 and kind of build through this. And I think we would feel pretty good about that.

And how should we think about the economics for you? Is it just the management fee? Are there other ancillary economics?

Yes. I think the way to think about it, yes, there are some economics, certainly, like the way that -- built in a couple of ways. One, certainly the servicing fees, we retain servicing on all the contracts. So that looks and feels just like a management fee, so we will retain that, which is great. There's -- whenever you do a securitization, you have some monetization of those economics day 1. But when you're doing your early securitizations, you're going to have less than you would maybe later a year from now, right? So you could expect like when you're putting your selling policies into the securitization, you can retain some of those economics just on that sale depending on where rates are at the time. But it's not -- that's not your most significant piece why you do it. This also frees up a lot of capital to go and buy more policies at traditional ROEs, right? That's kind of the way that we think about it.

We're not -- we're less concerned about those economics, but you do get a little bit of that. And then I would add that we kept 100% of the residual. So there was a 15% resid on this. We kept 100% of that, which we're kind of over the moon about because we know the underlying economics of the policies. We know the tranche that was in there, and there's a lot of alignment with our fellow investors there. So we're also excited about that piece.

Okay. Great. And I assume because last competitively, how defensible you think your moat is here? I don't think anybody else is doing this, right?

Yes. It's very defensible. And in a couple of ways, you have to be able to source the right kinds of contracts, right? Like traditionally, if you looked at these assets, they were originated for a very certain type of fund, the GPLP 5-, 10-year product that might have had different yield mindsets. With us being the originator of the asset, we can originate new contracts that are designed to fall into that securitization. And that's what is part of this moat is that if not, when you look at a broader set of assets, let's just say you were to look at a large tranche that somebody else is selling to you, you may not have all the policies you need for securitization. We can manage that at origination and build into the balance sheet the exact types of policies that fit best into that securitization. And that's why we're teed up to do another one not that far out, right? Because we already know exactly what types of policies need to fit and all of our buying structures around that. That's just really hard to do for anyone else that doesn't have access to the contracts.

Right. You mentioned GPLP structures. Is there room to have a much bigger franchise there? Or do you think the demand is moving in the securitization direction? And why are we not yet?

Yes. I think what we'll see is -- I think it's a fair point, and we will see higher demand in the securitization because the numbers are so much bigger, right? And I think we'll see some of that. In the GPLP from an economics basis, we do okay, but long term, we'll do better in the securitization. So naturally, as a company, it makes more sense to do more securitizations. And then the last thing I add, what I think we'll see is more interest into the interval fund because it's just an easier access product. We're the only one out there that has this type of fund. And it prices daily. Yes, it's quarterly liquidity. But this is a product that whether it's retail or more importantly, even pension funds and institutions truly understand.

So I think that over time here in the next like year or 2, we'll probably see more transition into an interval fund that was going to go into the GPLP because they have some liquidity. And they'll sacrifice some yield for that, but I think investors are more comfortable to have liquidity against that yield.

Good. Well, you teed me up because that was my next question. You recently got approval after a long process with the SEC to launch the interval fund. I think it will be kind of the first high-profile litmus test on retail demand for life science as an asset class, at least in the U.S. So could you update us on the plan for distribution of that fund? It sounds like you think there's institutional demand as well. And to what extent you can update on the pipeline for new platform adoption and/or how initial uptake is tracking?

Yes. We've been signing up RIAs as we speak. We have a few signed up already for distribution. The real step in any interval fund process is getting a custodian. And it's not that we face a challenge there, but there's a process, right? Fidelity has a process of x amount of dollars and x amount of time. Schwabs is probably the most stringent process that's a year-long wait regardless of who you are. I don't know. I think Apollo gets there quicker, but like whatever. We kind of have to work through the process. So -- and to gain access there to RIAs, they typically trade or they hold their clients' assets on like a Schwab or Fidelity. So that is really your initial step is saying, okay, I've gone through this huge thing. I'm active, I'm ready to go. We've put -- launched this with our own capital.

And now it's on Pershing as we speak today, and right now we're working with platforms like Goldman and others to get that on there. And then once that -- once that's there and it's accessible to RIAs where they can just write their single trade and just put the ticker in, that's where things really take off. And so we think in the next 60, 90 days, we'll have more feedback on those platforms. We're signing up RIAs who work on broadly like Pershing and Goldman. And then you'll start to really see those assets kick up. So I would say it's probably -- even though you get approved, it's technically not approved, but you get -- you're activated by the SEC for your perspective to put this out.

You've got about a 3-month process of building into custodians. We've already held our first Board meeting. There's money in there now. And then you're working with RIAs who have access to some of the maybe different custodian platforms that aren't just Schwab and Fidelity. And then you build into those and that thing really takes off. So demand is really high. It's just making sure that demand meets access. People have to be able to access it in a really simple form.

That's very helpful color. So all of this we're talking about, obviously, is contingent on your ability to source enough policies to fill the investor demand. And we obviously see you on TV a lot, at least for those of us that watch the financial press. So kind of firstly, update us on how your efforts to educate advisers and investors on the value of their life policies, how that process is tracking? I'll start there, and then I have a follow-up.

Yes. We have spent not just dollars in marketing, but that campaign pays off more than just a commercial and a calculator. We still receive 8,000 to 10,000 inquiries per month from our marketing campaigns traditionally that you see you're right on commercials, digital, et cetera. We also started doing different campaigns where we're being very active on periodicals and utilizing things like AI so that when people are researching this through AI, we're very active within all the AI platforms so that people can learn and educate, say, make that calculator available, right? Like we've made it available on Anthropic. That's going to be that next stage because you just have to remove the barriers to the education, right?

Most people still today, and I say most, like 90% just don't know that -- recognize that this thing really does have value. And so the more education and the more abroad we make this, the better, the more accessible we make it. And then expanding from there, we -- that helps us drive this what I call ancillary growth through our agent and adviser channel through national accounts. So the largest firms out there that we all know that might be financial advisory firms, RIAs, broker-dealers, we're now working with them directly at a national account level and being, in some cases, the exclusive origination company to source these policies on their behalf.

And here's where it's so fascinating, Patrick. You know what's getting me in the door, LifeARC. Lifespan-based financial planning gets us in the door. And then we talk to them about, well, wait a minute, there's a dual opportunity here. We can help you source more life insurance policies that could potentially be sold, that creates liquidity for your clients and now you better understand what their lifespan is so that you can allocate those proceeds to your own clients. And so utilizing our data and technology to gain access to these really large, massive investment firms who really control the largest piece of life insurance policies and relationship to the client, we're seeing that happen in real time. So when I think about expanding the pie, it's not just running more TV ads, it's the relationships we're able to capitalize on through our own data.

Great. And then I guess longer term, you put some pretty punchy TAM numbers out there. How should we think about how much of that is really addressable when you think about your -- what I think are stricter parameters than that whole market?

Sure. If we're really narrowing it down, I'd like to just start cutting things in half, right? Like if you take everyone over the age of 65 and you're saying, okay, how much of those policies are lapsing, right, over the age of 65. It's about arguably between $230 billion and $250 billion a year. Well, okay, let's just cut out those 65 to 75. And let's just go 75 and older. Well, that's going to take you about in half. And so that's going to take you from $230 billion down to $125 billion. Let's go a step further. Let's make sure they're the right type of policy we would want. And that's going to take you down from $125 billion, cut it in half again. Cut it down to about $75 billion. By the way, that's annually. The whole industry does $3 billion.

And so even if I were to say, aggressively, maybe we're not just 1% or 2% of what we think of potential market would be, we cut it down to what we think actually could happen. It's still -- we're still at sub-5%, maybe 6% of what could happen. And a lot of that has to do with people look at their life insurance policy and they just said, "Hey, that's just some asset that I'm going to let go away. They don't understand it's personal property. And the best way to access that is, yes, commercials that drives some things, but it's really their adviser. As we get more advisers bought into this premise that their life insurance policy is an asset.

Their lifespan is probably the most valuable asset they have, and we can accomplish 2 things: providing liquidity to their client and help them allocate those funds better by capitalizing on this data. That's what's really going to flip the switch. And that's where I think you'll see us go from $1 billion capital deployed to $2 billion to $3 billion capital deployed. That was my big target. If you remember when we first started talking, I think we were doing something like $300 million or $400 million capital deployed, and we were high-fiving, man, that's really cool. And now I've got very ambitious goals, right? Like -- and getting that north of $700 million, I thought, felt a long ways away 2 years ago. And now we're heading in that direction pretty quickly.

And I think that we've got $1 billion that could potentially happen too on capital deployed. And so I definitely think it's there. When I think about what we are doing is we are still being thoughtful and conservative around matching the capital to the origination. Like if you think about looking at our capital deployed numbers, it's not a stretch to then see where we did the securitization at because you're right, I can't come to market and not have paper. And so we're tracking that to where we are continuing to grow our origination at and making sure that we're meeting that.

Great. So the center of this flywheel is your technology advantage, right? Could you -- we touched on LifeARC a bit, a little less on mVerify. Can you kind of quickly give us an overview of the technology business, what your competitive advantage is?

Sure. It's twofold. One is that we have a significant amount of historical data that we have HIPAA releases on. And that data is really hard to get without HIPAA. HIPAA has very stringent laws. And that allows us to capitalize on that data and make our engine more intelligent. We don't put out any individual's information to someone else. That's not what happens. It's not shared that way. What we do is that we look at this in aggregate and as an individual comes in, what we do, do is we say as an aggregate, this is how you compare to everyone else. You can't run that comparison unless you have the underlying data. And it is this massive advantage. And it's the type of thing that even you look at major insurance companies, yes, they have a lot of medical files. What they don't have is the actual mortality data.

Where they struggle is looking back at their population and saying, what happened when someone turned 75, not when they underwrote them healthy at 55%, but what do they look like today? And they don't have that. And then comparing that what happens to the actual mortality experience because of that. So we've decided to take this data and make it very accessible to everyone. And the best way to do that was, yes, we are an AI-enabled. We've harnessed AI in a very positive way. And what I think AI is going to have a massive impact on is health. And the first thing we do is that we allow people, first and foremost, we help them get their medical files. If you've ever dealt with a loved one that's gone to the hospital and you're trying to get their med files, it's a train wreck. It is so hard to do.

Now they can literally just say, here, log in, here they are, download them, get a summary. It will all be on LifeARC for them, protected for them. And so thinking about access to that data and then improving someone's outcomes. So the first thing we're working on is improving their financial outcome by understanding how long you're going to be in retirement, you can allocate more intelligently. By the way, Patrick, this is going to have a major impact on annuity sales, I think, because if you're going to do an annuity where you've got $2 million, you want to earn 5% a year for the rest of your life, where I'm saying you can take down 8% to 10% if you just remain allocated because now you know you're not going to run out of money, what do you need an annuity for, right?

It's a whole different take on that. And that data is going to have a massive impact on a $1 trillion industry. Somebody teased me the other day and they go, this annuity company is just going to buy you and bury the data. And I go, I don't know. I guess that's good for shareholders. I guess we'll sort that when we get there. But that data advantage is what's truly -- and where you're going to get that 20 years of data like Abacus has. And so now we've built the access to it, right? And so when firms come to us or when people come to us, we've made it easy. We've made it accessible. And applying that across the board, the next thing we'll do is we're going to partner with health care companies and say, Hey, how can you improve your health options while you're in retirement, while you're extending your life, you can also improve your financial outcomes. The secret to this whole thing is it's not just a one and done, meaning we underwrite you once, and this is what it looks like. We underwrite you every year, and that's all inclusive in the fee.

So there's never a cost to somebody to come back to me the next year, which we will do, and we'll update their medical file, and we'll make sure they understand how their arc changes. It might go longer, right, might improve their outcome. Great. This is how we update the allocation. That doesn't impact us in a negative way. If it ends up being shorter, great, we should sit down with your and have a conversation what that means and how you're allocating to protect those assets maybe in a different way.

That's helpful. So I think you did a pretty good job of explaining where LifeARC stands and where it's going. It sounds like we'll get some news on that soon. But the other side is mVerify, which is tracking lives now, I think millions of lives now, but it's a pretty small revenue impact. Do you expect this to be a more meaningful contributor to earnings? Or is it more just support for the broader flywheel that we've been talking about?

Well, it is a little bit of both, but it is going to be more meaningful because mVerify is a function also of LifeARC, right? And so as we think about how that revenue is going to combine over time, they do kind of go hand in hand a little bit. But a couple of updates. For those of you that saw my interview on Fox Business and on Mornings with Maria, and I know the sense there's been some transition there. But I did a shout out to Secretary Bessent and his office replied. So it was really cool, actually, really amazing. And this is -- the mVerify program is going to grow, I think, significantly on the number of lives we track. We're going to start thinking about how we can work federally on this and help prevent Medicaid, Medicare fraud. Social Security Administration, we have calls scheduled with them. And I can't say for sure whether -- how that's going to evolve, but it's certainly making progress.

The way we think about the revenue there is it's kind of a step-up revenue over time. So we signed 3- and 5-year contracts that year 1 initially, your revenue is lower and then you build into higher cost per year. So you'll start to naturally see that revenue uptick just based on our current client base. But then you look at what's in the pipeline and there's millions of additional lives. And so the program itself, one of the things that helped in that and the last bill that was passed through Congress, called Big Beautiful Bill, was that they're requiring states to be accountable to this data on mortality. And we were already in the house when this happened, meaning that we're already working with these states. And so we're just expanding services.

Like, for example, one of the largest states for all retirees in the entire country, we now do it for the entire state, not just one specific pension, we took on all the retirees within the state. And the issue with the state isn't necessarily that they have issues with their state data. It's what happens when somebody who is a teacher in California moves to Florida, right? How do you track that interstate data? And so we -- since we have this on a national scale basis, we're able to provide that. That business is going to continue to grow. It's going to be more meaningful, and the income is going to continue to step up over time.

Makes sense. I have a few more, but a reminder, if you want to ask any questions, I've already gotten a couple through e-mail, but there should be a link to Slido in your invite and you can put your question in there. Let's touch on wealth management a bit. You mentioned the minority position in Manning & Napier. I guess beyond the strategic access of having that relationship, what is the return profile of an investment like this? And kind of how is the path forward for building out a broader wealth management business from here?

It's twofold. First, the -- what we'd say are agreements that we already have in place allow us to provide resources to them to source insurance policies that we could potentially purchase from their clientele, which was a senior aging population. If we just are successful there, the minority investment will pay for itself in the near term. That's how -- that's why this was such kind of for us, kind of a no-brainer to gain that access. We get asked frequently like why don't you just do that without having to make the investment? And you need a proper alignment with those firms at a very high level to get full access and to have those conversations with their clients. And so that's why we made that investment.

We also made the investment because we thought, gosh, we're going to create a lot of value for Manning on their AUM because we're going to provide all this new liquidity to their clients. They're going to invest that. You're going to see an increase in fees and an increase in revenue. So it really made sense to us that if we're providing this additional revenue through additional AUM, why wouldn't we participate in that fee growth?

Secondly is lead gen and certainly LifeARC. Being able to launch LifeARC on that platform gives us a lot of validation kind of day 1 as we sign up other firms. And how does that look going forward? I think that I'm less concerned about M&A on a go-forward basis around M&A and acquiring and rolling up RIAs as I am as more importantly, providing financial infrastructure tools like LifeARC to all of them. That's a much bigger play for me. And it makes a ton more sense and then operating that lead gen that we can provide to firms.

What we do know is that clients tend to like and work with people that are in local to them. And if we can partner with firms that are local and we generate a certain amount of leads from LifeARC or even our policy sale or policy acquisitions or lead gen on the policies, we've now built a very coherent and cyclical relationship and alignment with that RIA who is then going to do fees with us in relationship to, of course, our lead gen, we'll earn larger fees than just what we would on LifeARC across the board. So it's truly this flywheel across all of our channels that impacts, right?

We'll buy more policies because of Manning will increase our revenues, recurring revenues because of asset management because they're going to look at these funds that potentially they would not have looked at before, but now these RIAs are really looking at things like our interval fund because they're talking about insurance and policies and how that works and our Abacus Intel, our actual data and tech that they'll be using to enhance their own client outcomes. So Manning is the first example of that, and we're seeing those economics play out in real time.

Helpful. So you just authorized or the Board just authorized a new $100 million repurchase program. I think you've said in the past, M&A is a part of your growth plan. So how should we think about how you're balancing the low stock price and the repurchase program versus growth opportunities you're seeing out there?

Yes. I think we absolutely take this into consideration around M&A needs, debt, right, balance that against what the stock repurchase plan was. I think for us, it was -- we wanted the market to be aware that we're very active buyers. We're going to capitalize our shareholders by buying back shares, and we're aligned with you. Going back to the Board every 2 or 3 months seemed a little silly. So we said, look, we had done $80-plus million in the prior few years. Let's just kind of make sure we have this in reserves so that we could execute on this where we find appropriate. And to give you some historical background, which I always think gives you some insight to where and how we buy. Our historic acquisition price of shares is under $8 on the first $80-plus million.

So it's pretty easy to see where we'll be active. And as you get pullbacks like this that you've seen, the math is always really simple to us. If we feel like we've got a greater ROE on the stock than we do on buying policies, we buy the stock, right? We're very disciplined when it comes to that. And we base that on this premise of like, hey, if we think that we -- imagine the stock in some cases, is 40% or 50% undervalued based upon where we should be pricing next to our peers, makes a ton of sense to make sure that we're allocating to both those strategies. If we're looking at an M&A transaction, when you have a stock price that's lower, it requires us to have even more discipline in that M&A because you can't just use your stock as currency, right?

You've got to make -- because you're going to overdilute, which means that if you overdilute, then you don't have your dilution per share is a negative number, and you can't put that number out. It's got to be positive. So you need a positive number on an EPS basis against what you're going to dilute in any M&A activity. So those 2 things are taken into consideration on the buyback. But more importantly, even when we do an M&A, it's got to make sure that it's non-dilutive to our shareholders.

Makes sense. In that vein, the stock recently took a leg down on the back of some founders announcing a 10b5-1 plan that has since been canceled. So getting -- I think it feeds into a broader debate we have, like getting the stock more liquid would obviously help bring more investors into the fold, but tough to do it if the stock sells off like that every time you announce something. So how are you thinking about the stock's liquidity as an impediment to broader ownership? And what options could you explore after what happened this month?

And they sold very few shares. That's what was really interesting about it. It was like I think they sold like 75,000 shares or something. And it was scheduled over time. They are retiring. They've been big believers and remain massive believers in the stock. I think they were going to do something like 1% of their position. So they were going to be effectively leave 99% of their net worth in the company. And so yes, we were all a little surprised at the reaction because we felt like, hey, this is a way to add some liquidity without punishing our shareholders, making sure that we're doing it in a very thoughtful way. But that's -- look, that's what I love about being public. The market speaks. And that's the way it went. And so we said, okay, this is partly my fault.

I need to do a better job of conveying this message to our shareholders that this is non punitive and we're trying to do this so we can put more shares out. I own that and accept responsibility for that, and I'll make sure that we convey that message in a very clean way on a go-forward basis. But what we have decided to do to kind of help alleviate this on a go-forward basis is that we're looking at instead with strategics that would be interested in buying that stock in a private block sale so that it's nondilutive to any of our shareholders. We don't want that. We don't want to give the impression that anyone is selling. And we also want to leave the impression that, hey, if someone is buying the shares, it would be a strategic person who's in it for the long term and really send out that positive message to any of our shareholders over time. And that's the process on a go-forward basis. And we anticipate that we'll be able to get some more liquidity in the stock at some point in the near future, but we're definitely not going to do it at the detriment of our shareholders.

Yes. That's great to hear. I have one final conclusion question, but I'll get to -- there's a couple from the audience. This one is fairly technical. I think I know the answer, but I'll let you candid. Abacus disclosed the discount rate has moved from 21% to 10% over the last 2 years. Can you walk us through what changed in your underlying assumptions to justify that?

Sure. What's super interesting, first and foremost, on the discount rate that Abacus had produced, that was an output, not an input. So the reason why that's so important is that, that's just what asset managers are willing to pay for the underlying asset. And the discount rate is a result of that. So if they're willing to pay more for the asset, the discount rate comes down. If they're willing to pay less for the asset, the discount rate goes up, right? That's -- we're not sitting in a back room setting that. And I think broadly, if you just pick out 2 years, yes, you could see a 21% to 10%. If you add 8 months to that. So look at 3 years.

So look at that 3-year number, it went from 12% up to 20% to 10% what happened in interest rates over that same time period, our CIO put out what I thought was a very impressive shareholder letter describing this. And what we did is we overlaid interest rate volatility to how that discount rate moved. And it's easy to pick 21% to 10%, but if you ignore the prior year, when it was at 12%, all it was, was just to recycle back to where it was. And so that volatility for us, historically, we've seen this between -- anywhere between 10% and 14% over the last 22 years. And what was really fascinating is that when it went up to 18%, 20%, we went to market and with equity. And shareholders initially kind of came at me a little bit like, wait, why are you diluting me for equity to go buy policies at 20%. And this happened in Q4 of 2024. And I said, well, because look, I can buy these at such a great rate.

Fast forward to Q3 of '25 last year, our gross spread was 37%, so we took a massive advantage of that rate move. And that's what we should be focused on. It's -- the way to think about our model, it's really cost plus. And so the thing to focus on isn't the discount rate, it's actually our gross spread, which we put out every year -- or excuse me, every single quarter of 20% -- anywhere from 18% to 26%. And cost plus, if you think about it, it's almost like when you see an increase in gas prices at the gas station. And the assumption is that, oh, well, gas prices have gone up, the gas station didn't make less money or more money, right? Just its costs went up.

And when you see that kind of happen at kind of where we are because we're the origination company, we're able to adjust to those costs in real time. And so the resulting discount rate is just a result of where people are willing to buy the policies for. It doesn't impact how we buy, doesn't impact our valuation methodology, doesn't necessarily impact the underlying balance sheet. It's just where policies are transacting at that time.

And if you're turning the portfolio over twice a year, that's a pretty good validation on that, right. Right. The other one is on -- I think this might have been what you were hitting on the extension risk with the rating agencies, but like how are you factoring in the impact on longevity from things like GLP-1s and AI, as you mentioned AI as well as potentially extending, yes.

Yes, we're absolutely factoring it in. Remember, everyone we purchased isn't underwritten a decade ago. They're underwritten in real time in the last 24 months. And so you're taking a lot of these things into consideration. Specific to the GLP-1 factor is that, yes, you can have an increase in -- it looks like it could potentially reduce early onset dementia and Alzheimer's. It could obviously reduce inflammation, can have an impact cardiovascular tests, et cetera. But you know what else it does. It reduces your muscle mass and bone density.

For seniors, this is an issue. And let's look at the securitization, right? We took into account that we were improving mortality, meaning that people were getting healthier within the securitization automatically, which takes into account at a rate which was significantly higher than Social Security administration or anybody else does. We were assuming the population is going to get healthier. But the average age in that population was 84 years old. So ultimately, what you see is an impact to new medical technology to someone in their 80s is going to be much less impactful than somebody in their 60s. Now I think the question really comes to in 10 years from now, what's that population set going to look like?

Yes, it probably won't be 80-year olds. It will be 90-year olds in the securitization, right? And we'll be able to reduce that in real time. Like we'll be able to make that adjustment in real time. So those are some of the things that you'll see, but we do take those into consideration on the securitization and all the stress testing now.

Great. So to conclude, I have a higher-level question. You framed the discussion around the idea at the Investor Day that your stock has the attributes of a "100-bagger," which is obviously a statement that can pique a lot of interest for the people I've talked to. So could you kind of go through the key metrics that you think check the box on that 100-bagger journey and how you think that plays out in your mind?

I think that what makes 100-baggers unique is longevity in what they do and very successful. They also control their own destiny, right? They're clearly in control of their underlying market. And then they're really, really good at building infrastructure. So if you just look at those 3 things, right, we control our own destiny. We're an origination and market maker. Origination businesses over time do really, really well. And we've been doing this for 24 years. Just because we've been public the last 3, this isn't a new idea. This is an infrastructure that has been built and improved upon for north of 2 decades. And then you start to look at how that infrastructure builds into much big broader solutions.

So where Abacus sits is insurance industry is massive, right? $14 trillion, we've talked about that. But how this is now working into kind of cross relationships and how this flywheel is evolving in real time via financial infrastructure and gaining us access to real, real trillions of dollars here, trillions. Like we talk about the wealth transfer, but this is really happening. And capitalizing on that data, that's what sets those 100-baggers apart. Like what set Amazon apart from everyone else was that they had the infrastructure, they had the tracks that no one else did. And ultimately, they capitalized on those tracks. We're doing the exact same thing, and it's happening in real time.

And that's why Matt Ankrum, who wrote that book, 100 Baggers listed us as one of his companies because of that. We have consistent earnings. We have great margins. We have all the typical financial attributes, but most importantly, we have the infrastructure. I'll kind of leave you this one thought. I was presenting at the Milken Institute just recently and got to sit down with Michael Milken. And what Mike said to me was super interesting. He said, you know Jay, you remind me of way back when it was never an issue in the United States to have a bullet train just like Japan did, right? The issue was the tracks. We don't have the tracks in the United States to support a bullet train, the infrastructure. And what separates your business, which gets him excited and everyone excited is that we already have the tracks, and now we're just putting the train on top.

Well, that's a great way to conclude things, Jay, really helpful conversation, learned a lot. I hope everyone else did as well. Thanks a lot for your time.

Amazing. Thank you. Really appreciate it.

Take care.

Good day, ladies and gentlemen, and welcome to the Abacus Global Management Second Quarter 2026 Earnings Conference Call. [Operator Instructions] 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. Please go ahead.

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.

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

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

Abacus Global management more specifically refers participants to the presentation furnished today on Form 8-K 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 risks and uncertainties, which, if they materialize, could materially affect results. For more information on the risks, 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. 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. 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.

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

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, 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 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.

Start with a number that is reshaping our entire industry, $124 trillion. Over the next 3 decades, that is what will pass from baby boomers to their children and grandchildren, the largest wealth transfer in history and 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? 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. The opportunity is to replace that guest 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.

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. 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. 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, 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.

Our partnership with Manning & Napier will let their advisers apply personalized lifespan modeling across the $18 billion they manage for 3,400 clients. Manning & Napier 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. We are building the infrastructure for lifespan-linked finance. Our mission is to own the data, products and distribution rails that let advisers build portfolios around each individual's specific lifespan drivers. So the next generation invest those $124 trillion around real lifespans rather than generic averages.

That's the opportunity we're building toward. And this quarter gave us real evidence we're on the right path. Bill will take you through the specifics of the quarter in a moment, but I want to pull out 2 highlights I'm especially excited about.

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. For the first time, individual investors and their advisers can access this asset class through a registered vehicle, and it's a direct realization of the strategy we laid out at Investor Day.

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

This is a market that has historically been opaque and hard to transact and putting it on chain begins to change that. We've already started tokenizing in-force 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. Those 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. 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.

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

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. 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 & Napier integration.

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. 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, 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 & Napier.

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. 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. 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.

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.

Moving to profitability. Our adjusted net income, which excludes noncash stock compensation, non-recurring expenses related to business acquisitions and special projects totaled $27.1 million or $0.28 per diluted share. We are pleased to be able to say that these numbers are above our Q2 guidance provided in May of $24 million to $26 million of adjusted net income and $0.24 to $0.26 of adjusted EPS. 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. 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. 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. Our cash balance ended the quarter at $23.4 million with policy assets totaling $383 million. Our long-term debt balance, excluding any nonrecourse liabilities, stands at $290.8 million.

For the third quarter, we expect adjusted net income of $26 million to $28 million and adjusted EPS of $0.26 to $0.28 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 million to $106 million and adjusted EPS of $1 to $1.05 per share.

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, discipline in monetization and the continued build-out of our fee-based and technology revenue.

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, 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.

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. 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. 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 & Napier. Since closing the investment in May, we have established a live referral channel between the 2 firms, and we are converting Abacus' own unqualified leads into Manning & Napier wealth management clients, 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, surfacing value that was sitting untapped in their existing client base.

And underpinning all of it, we have begun rolling out LifeARC across their adviser network, 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, 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.

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

Let me start with the balance sheet. For the second quarter, annualized portfolio turnover was 2x at the top end of our long-term target range of 1.5 to 2x. 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, 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% plus. I want to underline what that number represents because it is central to how we think about the business.

We turn our book roughly twice a year, which means these are not marks on the screen. 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. 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. That 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 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. This is the first registered interval fund dedicated to the longevity asset class, and it opens our strategies to individual investors and their advisers for the first time. 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, 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.

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 2 sides of the house rate because we manage capital in 2 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, 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, 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.

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. The dominant story across alternatives right now is private credit and specifically the pressure it is under.

Over the last 2 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.

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 on us and whether the liquidity terms hold up under stress. Most of the large managers have argued reasonably that the stress is idiosyncratic rather than systemic. I'm not here to mitigate that. What I want to point out is why it is largely not our problem.

Our assets are not corporate credit. Their 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 are looking for when they diversify away from crowded corporate credit exposure.

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. 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.

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. And this quarter, the results supported it.

Stepping back, the story remains straightforward. We run differentiated origination platform, supported by disciplined underwriting and consistent monetization. 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 laid out at Investor Day, and the second quarter was real progress against that road map.

With that, let me turn it back to Jay for some closing thoughts.

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.

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

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. 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.

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

[Operator Instructions] We'll take our first question from Patrick Davitt with Autonomous Research.

My first question is on the guidance. So you just beat the high end of your guided range for 2Q, beat consensus significantly and now guiding to a number above consensus in 3Q, 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 4Q for some reason? Or are you just staying conservative?

Yes. 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. 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. 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, 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.

Okay. Fair enough. And then my follow-up is on the interval fund, finally got it launched, which was great to see. So I'd be curious to get your kind of updated thoughts on early take-up from advisers you already are close to either at Dynasty or Manning. And to what extent there is a pipeline of more distribution platforms coming online in the future that you're in discussions with?

Yes. Interval Fund is one of a kind. It took a significant amount of time to work through the SEC process, but we're incredibly proud to have the product that we have out now. 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. Dynasty and Manning and others were certainly 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.

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. 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.

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.

We'll turn now to Crispin Love with Piper Sandler.

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? And then just expectations going forward over the near term? I believe you've discussed a range of $130 million to $150 million in the past. Does that still make sense? Or could you see elevated quarters similar to the one that you saw this quarter?

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. 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. 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.

And if we are able to move forward to the 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 million of $150 million to that $150 million to $175 million range.

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. 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 million to $150 million, closer to $150 million to $175 million. We had an exceptional Q2.

What I like to point out there is that, if we have the capital that matches the demand, and we certainly have the origination and the inventory to match that. So very, very compelling and takes us into what I think is going to finish out to be a pretty strong year.

Great. And then during the Investor Day also during this call, a lot of talk about LifeARC. I know the platform is new, but can you share just the latest there beyond using it internally and with Manning & Napier, I'd assume kind of financial advisers, insurers are the key customers for the product. 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, but just any color on pricing targets there would be helpful.

Thank you. LifeARC 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. And we received a pretty incredible response from individuals who wanted to kind of work through that program with a calculator online that they can utilize at abacuslifearc.com.

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. 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. And in that process, we are in negotiations with some firms as to kind of what that rev share model might look like.

With that said, our primary focus with LifeARC is rolling this out within the Manning & Napier platform, 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 multimillion 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 leading to their legacy.

And I've spoken a lot about this, but this is a $124 trillion market of generational wealth transfer. And what it's really leading to is conversations with that next generation. 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 and the model that we look at pricing this at would be a recurring revenue model in a rev share.

Great. Did Treasury Secretary Bessent reach out?

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 LifeARC and mortality verification. And I think it's just a matter of time before that program rolls out. I'll just touch on one thing.

Hopefully, you noticed this in the deck, we went from 4 million lives track to over 6 million quarter-over-quarter. I mean, just a massive quarter-over-quarter increase from pension funds, insurance companies, et cetera. So that program is really gaining traction.

We'll turn now to Andrew Kligerman with TD Cowen.

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? 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. 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 of gains to frame.

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

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 as we continue to have lower cost of capital.

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. 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. 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. 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 that of which typically lapses. If you just break that down into what we think our addressable market is of the $14 trillion on an annual basis, annual, about $250 billion. I think as 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. 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.

So increased demand is here, 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. 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. 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.

That sounds very attractive. Manning & Napier, so it feels like very early innings still, right, because it was a May of '26 deal. So it sounds like the runway is on the come. But from your prepared remarks, you seem 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 & Napier as opposed to just doing a pure revenue share as you were discussing? And with this, are there more Manning & Napiers out there?

Yes. Manning & 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, 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 and the synergies that we're talking about exist and that we can grow and then replicate in other areas of the country.

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

And so logically, as we look across the country, yes, there are additional opportunities that if we can find similar synergies with, I think it's going to have a massive impact on the RIA industry in general. But when we think about our distribution channel and how we continue to distribute our own products, source policies, those Manning & Appear firms like them are incredibly appealing.

We'll turn next to Timothy D'Agostino with B. Riley Securities.

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? And kind of is a lot of that coming through the longevity fund?

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. 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.

And I think that's really the compelling part of the story is we're diversifying a lot of our revenue, but we're not taking away from the other. And this is really what I want to hit home here. is that when you look at the Life Solutions business, that Life Solutions business continues to grow every single year. 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, driven by the fact that we're adding $5 billion potentially -- 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.

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, 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.

All right. Great. And then just another one that's on that same slide regarding the $3 million for technology revenue. Obviously, about like $0.8 million for the first half. Just trying to understand how you get to $3 million. Is there -- is anything of LifeARC involved in that? Just trying to put that together.

Yes. We will be adding LifeARC revenue here in the near term. This 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. So year 2 revenue is higher and then year 1 and then year 3 grows and a lot of these are 3- and 5-year contracts.

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 2, 3, 4 and 5. 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. And it does not necessarily include yet the revenue that we believe we'll see from LifeARC.

And what's amazing about the LifeARC revenue is that, that's going to be super interesting because it's also going to help us in our private wealth channel. So as we're increasing our assets under management in relationship to private wealth, LifeARC 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.

We'll go next to Randy Binner with Texas Capital.

I have a couple here. So on the asset management results for the quarter, I think they came in below Street expectations. 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? And in that, was the fee rate on AUM also a little bit lower than expected this quarter?

Yes. 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. 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. But there wasn't anything -- from our perspective, we looked at it and we're like, yes, 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.

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 and also kind of shifts more towards consistent growth of revenue there.

Okay. And so the fees 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?

Yes, that's correct.

Okay. Great. 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? And does that have any implication on kind of the tax rate for the rest of the year?

Yes. 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 interest deduction. So -- but you'll see that normalize towards our historical rate for the year.

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?

It should be a little bit lower than that.

[Operator Instructions] We'll hear next from Dmitrii Primashov with Freedom Broker.

So I just wanted to clarify regarding the dividends. Should we expect the continued dividends at the current level going further?

I apologize, I didn't catch part of your question. Were you asking about the dividends?

Yes. Should we expect the dividends at current levels going forward?

Yes. 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, 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 for 2026. 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.

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.

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. 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.

And that $124 trillion and 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. 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, and we look forward to Q3.

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.

Full house today. This is pretty cool. Everyone know the history of this room. So just a quick, if you were there last night, amazing, Anna, who had led our history lesson on not just the New York Stock Exchange, but a bit of history that I was kind of uninformed on. She was spectacular and wonderful. And one of the things that she didn't get to talk about was this room. So this room that we're in, we purposely selected for this event because we were very excited, partly because this used to be the kind of ballroom lunch room where the brokers would come in and have lunch at a specific table.

And ultimately, what happened was, and I think they've covered some of them now, but there would be scaffolding and other things outside of this room on the outside of these windows here, and you would look for little drill holes because people would sit on the outside and drill holes into the side of the building so that they could hear what the brokers were talking about and try to pick up on stocks, get stock tips, different kinds of things that had happened. It's pretty cool. Like you can actually go through and she showed me one, I don't know if it was real or not, but it sure looks cool.

And I kind of think about that now when you're going to sit here today at Abacus' Investor Day. And first of all, we couldn't be more excited, thrilled about not just where we've been, but where we're going. And I have to believe that as the market has really learned more and more about Abacus' story, there's a bunch of people out there along the side listening to these little holes and wishing they were in this room. As the story continues to evolve and become more common and understanding, that is what's starting to happen in real time.

And when we think about time, the first thing I want to do is acknowledge each and every one of you for taking time today. We've got a terrific agenda. We'll touch on some of those things, and you're going to have an opportunity to really see, listen to the people that are really driving this engine, really driving this car. And one of the takeaways that I hope that you're able to pull from today is that what an amazing business. I've heard many of you say that to me, but now you'll actually understand. You'll see what I get to see every single day. And you'll sit back and look at this and say, boy, that was a great use of an incredibly valuable resource, my time. That's what I want you to say.

Today was a great use of my time. How do you place a value on that? It's really interesting, right? Like when we think about commodities, we think about gold, we think about oil and gas, not very often do we put or think about the most valuable commodity that exists. by far is your time, your individual time. Now some would argue that time is not a commodity. Why is that? Well, because it's not a tradable value. Now I would argue otherwise. Because time is scarcity, it's limited resources, it's incredibly valuable. But they are right. How do you place a value, an incremental dollar, a tradable dollar on time.

Let me walk you through a quick exercise. Each and every one of you, just think in your head, if I were to give you a gift and that gift was an additional year of your life healthy and prosperous, no issues. How much would you pay for it? If I were to sell that to you right now, how much would you pay for a year? Think about a number in your head. I think about it all the time. The challenge is each and every one of you has a different number. And what's the basis for the dollar number. Sometimes it's what you might have in your bank account. But more than likely, it's because you're at a different position in time, meaning that when you think about time -- as a period of time, you think about it in a straight line. You think about it, I'm 20 and I'm going to be 80 or I'm 80, I'm going to be 85, it's a straight line. What do physicists say about time? It's a curve. It's actually an arc.

So what sets the value of your time is where you sit on the arc. If you're in the front end of the arc, you're going to pay less for that year. If you're on the back end of the arc, how much will you pay? Everything. What Abacus has done has helped you solve and will help you solve and will help everyone solve. What the value is of the greatest, most scarce and most important resource in the world, your time. And how we do it is, is that we help you better understand where you are in your arc. Think about that. We all love market maker businesses. Abacus is a market maker in what we do in our Life Solutions business. We are going to be the market maker, the infrastructure. I'll say it again, the market maker of time.

Now you think about that. Tell me about another business or company that you're a part of that can present that type of opportunity. We're going to have a couple of great speakers today and where we sit and you think about that concept of how Abacus is going to be the market maker of time. As we always say, please read those. I'm not going to. Ben Franklin said what? Time is money. So Ben Franklin said, pretty wise guy. It goes back about 250 years that time is money. How do you correlate the two? So many times in financial advice and financial planning, what we talk about is how much you will have at some point, maybe how much you will have in retirement, how much you will have for your legacy and for your heirs. When we think about being the market maker of time and you look at the 4 verticals of where Abacus sits in our Life Solutions business, how do we set the value of time, the net present value of their life insurance policy, right? Pretty incredible. We paid out $0.25 billion as a market maker of time.

Asset management, how we manage our portfolio has raised nearly $1 billion over the last year by understanding the value of time. And now when you think about personal finances, the question that's always asked for somebody is how much will you have? That's how we manage assets today typically. We're reframing the question that says, instead, how long will it last? And then we're going to say, how much do you want to spend? So let's take a quick example. We have 2 neighbors, both age 65. These are real examples, maybe not my neighbors, but one of yours. Both age 65, both retiring with $2 million, both handed the same exact financial plan.

On that $2 million, what typically happens is neighbor A goes in, sits down with their financial adviser, they're 65. I have $2 million, what does their plan look like? It might be 60-40, it might be 2% to 4%. It might be some standard premise. But what's fascinating is what about neighbor B? The second neighbor goes in and gets the same exact plan. What we do know underlying is a fact though is that their arcs are different. Neighbor A sits on an arc that has lots of time left, very healthy, projected lifespan to age 97. Their incremental dollar value that they're going to place on time is much different than neighbor B, who has a lifespan much shorter. This person is impaired with an 11- to 12-year lifespan, age 65.

How much value do they place on their time, much more, right? These customized solutions are not easy to do unless you have all the data to support that. And you're going to hear a lot about that today. All the data we've aggregated over the last 20 years, we are now implementing this to be able to design two different plans as they should be for these two different -- completely different individuals, even though they're the same age. Customized solutions and financial planning, what ends up happening is something very, very compelling. First and foremost, we end up increasing their income on a significant basis. Neighbor B, we can kind of get and understand, 11- to 12-year lifespan, of course, you're going to take out more income, $160,000 a year, leave another nearly $0.5 million a year, shorter lifespan, we get that.

What the shocking piece to me was that when we look at this and you have somebody who's going to be in retirement for, in this case, what, 32 years. But when someone is 65 and they're going to live a long time, what's the first thing you say to yourself, go conservative because you don't want them to run out of money. The exact opposite should happen. If you have 30 years to go in your 401(k), right, you want to retire at 60 and you're 30, how do you allocate? Do you go 80% bonds or the reverse. This is the difference in the power of these stories. This is how you place the value on time. And how we're able to do it is that as a financial infrastructure firm, we created an entire line called within our Abacus Intel division called LifeARC. ARC stands for Actuarial Risk calculator. This is helping you better understand the value of your time and making Abacus as the infrastructure of that time, the market maker. And this will apply not just to what Abacus does with our clients, but financial firms across the country.

We start with our medical history analysis, all of our lifespan modeling, and those 2 things have such a huge impact to someone's investment and their income. This is a real example, and I'll walk you through this just so that you can kind of get an idea. 79-year-old Floridian, $8 million portfolio. We actually acquired this individual's policy and sat down with him and then went over and said, how are you going to apply your lifespan. So we applied this in two ways. One, the value of his life insurance policy. Second now is how do you apply that to a financial plan. With a 9-year remaining lifespan at age 79, what he was doing was that he was taking out about 2%, about $160,000 a year. That's kind of where it was.

What we ran is we said, well, with 9-year lifespan and as you graduate this down, you're going too conservative too early. He could actually pull out $317,000 a year and increase the value of his account to almost $10 million. This is the impact in understanding time. Time related to asset allocation is going to be a huge fundamental difference. How does this all work? And what is the grand scheme and what is the size of this market that's available really quickly. What we see is in the financial services market, do I have to work with every single one of these clients? No. But what we will do is that this will be a financial infrastructure that will be then utilized by every financial planner. And guess what, they'll pay us a little bit of something all along the way.

When we think about recurring revenue, the businesses that have been most successful is through infrastructure and financial infrastructure. We will be the financial infrastructure and engine for how financial planning is done not just today, but in the future. By the way, that client that we increased those assets to, they're coming. They're leaving a major firm because no one has ever spoken to them about this in the past. How big is this opportunity? We've all heard about the $124 trillion wealth transfer. Just a point of perspective on what the size and scale of $124 trillion means. If you were to spend $1 a second, when would you have to start spending money to spend $124 trillion to get to today? The ice age, the ice age.

You want to talk about the size of a moat and the size of a market, start with one that's $124 trillion. This is a generational wealth transfer that is occurring. Wouldn't it be nice if you were on the other side of this as a financial planning firm and you knew when that was happening. Let's go back to the client. We talked about the 79-year-old 9-year plan. You know the other conversation we had was with his son. Speaking with the son about how this financial arc is developing now changes their financial plan. And you know the next thing you do, you don't underwrite them once, you underwrite them every single year because that plan, that arc -- that individual's arc can change every year.

So on a commodity basis, if I were to share with you what a commodity market looks like, that's $124 trillion that we're the financial infrastructure for, you get pretty excited about it. And that's why, hopefully, you see how much excitement I have about this. We haven't started this program on our own. We made a material investment into a firm called Manning & Napier. Some of them are here, so welcome. And that's an $18 billion asset management and RIA advisory firm. We've been launching this program directly with them. In the very short term, we have discovered opportunities to the tune of tens of millions of dollars in the first month. This isn't something that says, "Hey, Jay, that's a novel great idea. This is something that is literally in practice right now and is being effective, and we are literally shifting the mindsets of our clients in real time by helping them better understand what the most valuable resource that they have is as a commodity.

And we are the market maker for that commodity. And that's the value of their time and the value of their time increases their portfolio many times 2x in income and 20% to 30% on the legacy that they're leaving to their clients. How big is this opportunity? We're going to meet and sit down with someone here in just a few minutes. His name is Matt Ankrum. He was kind enough to include us in his book, The Coffee Can Investor, where he talks about 100 bagger opportunities. Frankly, when you look at the size, scale, scope of this kind of opportunity, I feel like Elon Musk would say it's at least 1,000 bagger, but Bill would lose his mind if I said that publicly. So I'll stick with what Matt said.

And when you have a tailwind of $124 trillion over the next 30 years, it's pretty exciting, knowing that you can build recurring revenue on an infrastructure play through the most core asset. And by the way, you know who else is doing this? No one. Why? Because they don't have the data. We're sitting on the data. We're sitting on the records. We're sitting on the actuarial data to produce this into a $124 trillion-plus market that people are coming to us for, and we're changing the impact in how they view not just financial planning, but the most valuable asset they have. And we're driving that through our data, through our AI-driven platforms. And of course, the product result of that was our LifeARC program. I said that time is not a straight line, physicists agree with that. Your lifespan isn't either. You shouldn't measure it that way. It's an arc of probabilities, and you just are going to sit back now and solve for where that arc is, and Abacus is going to help you as the market maker for that arc. Pretty heavy.

We've got a lot of amazing things that we're going to talk about today. Again, as you hear through and sit through our presentations today, one of my hopes is that your biggest takeaway is Abacus has got an opportunity here, and we are just literally at the beginning. It's been an amazing 3 years. Where do you see the next 3? Because it is very, very rare. You have the company sitting in the position that it is today that actually generates revenue with a technology, with a basis and a market size and scale that's doing what we're doing right now in real time, and you're seeing it happen in real time.

So as we go through our agenda, again, please enjoy everyone that's getting up here to work through this because I think that they all have something pretty incredible to bring to the table. Just as a point of reference, when we get to the 11:30 portion where we have our 2 guests coming up, interviews, we're going to turn off the live feed, and it will just be a gift to you here live. So don't leave early. If you don't know who John Catsimatidis is, you will. He's a lot of fun. And of course, Maria Bartiromo is joining us later. But before that occurs, and before we launch into our presentation from Bill on the financials, which is also thrilling.

Bill, just, yes, we've got a terrific guest speaker with us. I've had the opportunity and pleasure to get to know Matt over the last, gosh, Matt, probably 6 or 7 years when he first started looking at our business. Matt has co-authored a book called The Coffee Can Investor. If you're familiar with Coffee Can Investor, it actually goes all the way back to Warren Buffett, but it's the premise behind 100-bagger companies and the qualities and themes that those companies have had historically. And then he went a step further and actually picked what he thought would equate to some of the next 100-bagger companies. And I'll take a moment and just read his bio here.

He is a managing partner at Ankrum Capital. He's a chartered financial analyst. It's been a career studying what actually separates good investments from truly extraordinary ones. That's why he picked us. He's best known for his 100 bagger study, deep look at stocks that multiplied in value 100x across decades and for the long-term compounding and driven investment philosophy that came out of research. That work is the foundation of the book, The Coffee Can Investor. And we're proud to say Abacus is featured in the 100 Baggers companies' book. And Blake, I'm not sure where she is. There she is. I think we have the book or do we order those? We can -- anybody who would like a copy of that book, we have those, and we're going to be sending those out to you.

And before I bring Matt up, I do want to acknowledge our team who put all this together. So Blake Gallimore and the ICR team, thank you so much for all the hard work. Last night, if you enjoyed it and you love this today, make sure you tell her thank you. She's worked endless hours to continue to put this together. But in the meantime, please help me join Matt up on stage.

Everybody right here? [indiscernible] Okay. What -- how does the company get kicked off the list? I want to make sure we don't ever get kicked off that list. How do we -- so look, Matt, like let's kind of start. We've got a few minutes here. We just want to introduce everyone here to what you did. Could you start with a little bit more detail on kind of your original background? What got you here? What drove the idea behind The Coffee Can? And I know it involves your family and some other things, and I think it's worthwhile hearing that piece.

No, it does. And thank you, guys, for coming out and hearing us. So I was a portfolio manager and analyst for about 20, 25 years. Then I went on and became Head of Strategy for a Fortune 500 company, then went out and cofounded my own FinTech Software-as-a-Service business, eventually then became CEO of a brain neuro-rehabilitation business and then got back into on the investing side. What I think changes a little bit is that when you do both sides, you actually have a very different appreciation for what investing really means, right?

Because as a portfolio manager, it's really easy to put a 50 basis points improvement in the margin for the next 20 years and think that's just going to happen. What you end up really finding is when you're running companies, you realize how hard that is and what it takes to do that. So with that, one of the things I did was I went out and said, well, I read this article by Robert Kirby talking about The Coffee Can portfolio. And it's a great article. But basically, he came out and said, here's a way to put great companies and own them for a long period of time and how they compound with time. And so I went in and I was looking at that, I was like, well, which companies would I want to put in that portfolio?

And so I went out and did a study, and it's -- I call it the 100-baggers study, but I went out and looked at all companies that went public from 1980 to 2000 that increased in value by 100-fold. And the reason why I was looking at over that time frame was that I wanted to have looked at it about 30 years. So it's 100-baggers over 30 years. And the reason why I chose that number was that that's about double what the market is. So these are phenomenal companies and what they do. And so that's what I'm sure we're going to be talking about is the real characteristics that came out of that. But it really -- the book, one of the reasons why myself and the actual author who -- if you like the book, it's because he wrote it, it wasn't because of me. I'm just kind of the content in there. In fact, I know he's a great author because he actually can make me sound interesting.

He was the President of CBS, right?

Yes, he was the co-head with CBS News. And I've known him for like 25 years. And so what we did was both of us looked at it and said, here's an opportunity to take what I've learned and then be able to basically provide the financial literacy for others. And while doing that, what we're looking to do is actually build a portfolio for my daughters and talk about building kind of generational wealth for a long time. And so that's what the book is about is going through the process of saying, taking the ideas from the 100-bagger study, applying them to actually finding stocks, which is always a dangerous game, putting the ideas down on paper. But then being able and willing to hold them for 30 years.

Yes. I think that's the point, right? I think that's -- when I read the book and I thought about this, and some of you in the audience may be feeling the same way, holding a position for 30 years or considering that hold for 30 years with the amount of digital information that's available to us and the frequency of trading that you now see, would you think that of the relationships that you saw in those companies, I'm just curious within the study at all, whether you had kind of identified that said, gosh, there weren't that many people that held it for 30 years. I mean you as a portfolio manager, you get redemptions, you've got to sell it. I mean, was that -- is that the biggest issue with 100-bagger companies? Is it people just don't stay in them?

That's why they don't get the returns. Yes, of course. So -- but for the companies themselves, they're the ones that are just compounding every day. They're doing the little things every day. From a portfolio manager standpoint, the reason why most people can't do it, they just can't afford it. They don't have the intestinal fortitude to go through that. So to give you an idea, these stocks, most of them -- all of them obviously went over 100-fold, but some of them went 300, 500, 600 folds over that time frame. But here's the crazy thing is that the average drawdown from the peak to the bottom was 70%, meaning every single one of those companies, you had the average down 70%. Some of them down 95%. Obviously, Amazon was in there. But to be able to hold that through is what is so hard for a lot of people to do.

And what Jay is referring to as well is that the average holding period today, five and a half months. I mean think about it in the 1950s, '60s, it was [indiscernible] five and a half months. And the reason why that is such an important number is because think about you as a leader of a company, the likelihood that you could change the direction of the company and do anything in five and a half months. So a lot of them, they're just trading on kind of predicting some reason why the stock is going to change in the short term.

Sure. That's super interesting. I mean, LifeARC itself, where we talk about this fundamental technology that we're bringing out and that we're rolling out is going to have this huge impact, took us 3.5 years to build, right? And that would have -- nobody could be able to trade on that tech. And that's a super fascinating piece of that story. I'll add one thing to what you said, which is super interesting. I had a conversation with Peter Lynch. And one of the things Peter said to me was that within any 12-month period, particularly small-cap stocks, you'll see 100% spread between the high and low. I mean just think about that, right? And frankly, we saw that with Abacus, right? Like I think we're up 130-some-odd percent year-over-year.

But -- and then Peter's premise was, though, is that you kind of reset your lows, right? As the stock continues to grow over time, you're kind of resetting your lows, but you see those spreads happen. When you think about the qualities of the underlying companies, I think what you touched on is super interesting, just compounding returns consistently. What were a couple of others? Was it management consistency? Was it -- maybe that's too basic, right? Or were there some other things that are pretty common that we should be paying more attention to?

Yes. So as I was going through the study, several patterns kept emerging. The first one was that quality comes before everything else. Said differently, no mediocre company compounds its way to an extraordinary stock over time. Second was that growth matters. But the duration of growth is a lot more important than the velocity. Now the average company in the study actually grew their top line by 20% a year for 20 years and that's remarkable, right? But the bigger lesson from all of that is that it was actually -- duration of growth actually beats explosive growth. And so -- and the reason why that comes about is if you think about it in compounding, the heavy lifting all comes at the later years. It's the same reason why Warren Buffett has actually amassed 98% of his net worth after the age of 65.

It's amazing.

Yes. The third was that the best companies actually improve -- continuously improved. So in the study, on average, they expanded their operating margin by 25 basis points a year. That's 0.25%. It doesn't sound like much. And in fact, in the year it happens, it feels almost imperceptible. But those small thousands of changes that they do are the ones that actually create the insurmountable advantage that the companies enjoy years later. So if I switch it to the qualitative side, those are interesting as well. And so one was nearly 60% of the companies in the study were founder-led or family run.

And you can say, well, why is that important, right? Well, think about it, if you're owning these things for 30 years, management matters. And what was fascinating on this, too, is that every single company in that study actually incurred some kind of existential crisis, whether real or perceived. And it was the leaders and the winners that came out of this were the ones who are willing to make the financial or the difficult decision to ensure the financial health. And I know this -- others might have a different view on this, but what I've actually found is there's a meaningful difference between owners and caretakers. Just like I think there's a big difference between parents and babysitters.

Perhaps the most surprising finding that I actually had from the study was that over 80% of the companies were serial acquirers. Now this was surprising to me because as a young analyst, I was always taught the only -- you want the growth that actually matters that you should value is organic growth. I no longer believe that to be true. And it makes sense, right? If you have a high-quality company generating high returns and growth, they throw off a lot of cash. So it is the smart manager who actually intelligently deploy that money into strategic acquisitions.

Now I want to note, these are not the bet-the-farm massive acquisitions like an AOL Time Warner. These are actually very thoughtful, strategic and oftentimes really small bolt-on acquisitions that accelerated the company's strategic and R&D road map. And then the last one I'll actually point out is more of an observation. Not one of the companies in the study came from an industry that we consider glamorous. They weren't chasing the hot markets. In fact, if you look at it, most of them were unsexy, pretty boring industries, but they were massive in construction, financial services, healthcare, right? And these leaders every year took share year in, year out.

And what it actually told me was that extraordinary returns are driven more by exceptional execution, not some exciting industry. So if I was to sum up all of my kind of the learnings that I had from that, it'd be this, is that the greatest investments are not built on predicting the next big thing. They're actually built on owning exceptional companies by exceptional management teams that actually can compound for an exceptionally long time.

Sounds like Abacus. That's terrific, Matt. And it's interesting on the Warren Buffett piece. I've said that. Actually, we used that with our case example before when we think about how we asset allocate to 65-year-olds. Warren Buffett wasn't in fixed income, right? And accumulated 98% of his wealth in equities, past age 65. And so when you start to kind of tie all that in, it's really fascinating to then see how everybody can apply similar investment strategies to the same way that Warren Buffett did. We -- I'll give you one more, and I'm sure there's lots of other questions, and I want to make sure that you all have an opportunity to chat with Matt. You'll all have a copy of his book. And Matt can make himself available if you want to dive down deeper to some of these concepts.

It's interesting, though, when you think about these companies, right, over a 30-year period, where did they start 30 years ago, right? I mean did they start as large cap? Did they start as small cap? Did they grow into large cap? I mean compounding 20% per year, I get that. I mean that's pretty incredible over a longer period of time. But particularly founder-based business, I assume like a lot of companies started in garages. But was there any trend there that said, hey, they erupted out of this area or came out of this area? Was it just consistency over time?

Here's something that I think we as humans struggle with is this -- in this concept of compounding, right, is that just -- if you're just in the market over 30 years, you should expect your investments to increase by about 20-fold. Now to put this in perspective, everybody who actually owns NVIDIA if you think that it should just run in line with the market 30 years from now, it's going to be, what, $110 trillion company, which boggles people , right? So what I actually found was it wasn't necessarily the size of the company because they all come smaller, right? And they go smaller to big, after big, kind of larger.

But here is what the amazing thing to me was is that all of them actually were fairly derisked at the time that they went public. And what I mean by that is that they already had a viable product. They already were generating good economics, and they actually already had the ability and demonstrating the ability to grow. So that's, again, playing into kind of what a lot of people's misperceptions are is they're always wanting to chase a hot new thing. And the reality is they're just great businesses that continue to grow. And again, they have to start small-ish because when you're increasing by 100-fold, it's a little bit -- it's probably going to be a little bit harder for a [indiscernible]

Where would that put our price target, somewhere around $100, -- our price target somewhere around $100 is what you're saying?

Yes.

Okay. Just that's where analysts are. I'm just kind of lobbing that out. Matt Ankrum said it. So when I go into your offices and I tell you we're worth $15, I think that's fair.

Actually, the price target would be $1,000.

Oh, that's right. I'm only a 10 bag.

Yes, you're only a 10 bag.

$1,000, Bill? [indiscernible] me in.

Yes. But remember, that is over 30 years. And that's why...

30 years, let me think about my LifeARC. I'll be here. How would you say?

I need to see that.

This has been terrific. Our time is a little bit short, but I also just wanted to acknowledge and thank you for including us doing the research, you did the work. And the information and data that you're providing is incredibly useful to investors everywhere. And look forward to seeing you again up here. Thanks, Matt.

So in summary, $1,000 price target. Okay, I'm kidding. I won't even say it out loud just because I'm sure David will lose it, our Head of IR. But it's just important to note, there are some basic great qualities that encompass businesses. And if you heard that list, we check a lot of boxes. And so I think it's fair to say why we were included in Matt's book. And when we did go public, we were a business that had produced consistent revenue for over 20 years in the same industry, which someone might seem as a pretty boring industry, right, in acquiring insurance policies and using medical data and lifespan data, but then you look at how we've grown.

We didn't break out '25, but 20% a year is exactly where we target. And if we go out and you're a long-term investor and you start to see some of these visions, which I'm hoping you'll hear today, we will affirm that there's a great and significant opportunity here for everyone. And we're going to continue to grow because we've got a phenomenal business that generates revenue with consistent management. And we're excited to have you be a part of it.

And speaking of that, our next presenter is Mr. Bill McCauley. Mr. Bill McCauley, who has recently assumed the role as well, was earned the role of our Chief Operating Officer. He's our Chief Financial Officer, wearing a little bit of dual hats as well. If you haven't met Alexei, he's here in the office or here in the audience as well. He's our Chief Accounting Officer. And the point is that we're bringing from within some pretty amazing talent. And Bill has been with us now 6 years, I say it right this time. Sometimes I extend it. But he's been with us 6 years and has seen the growth and how we've been able to expand this business, growing from where we were, I think, our year 1 public was somewhere around $35 million EBITDA to, I think consensus has us at $150 -- Patrick, where are we at now?

North of $150 million. I'm not going to say whether that's target or not, I've just thrown out a consensus number. What an incredible asset to our firm. He's worked at and had significant financial roles at Transamerica, MassMutual, McKinsey, John Hancock. We were honored to get him 6 years ago, and I'm even more honored to introduce him here today after 6 years. Thanks, Bill.

Thanks, Jay, and thanks, Matt. What a great interview. I want to take a few minutes and surprise, put some numbers up on the screen because I think that criteria that was discussed, that financial DNA of 100-bagger companies, that maps almost perfectly on to what we're seeing in our actual financial results. So let me show you the scorecard. Q1 2026, we had revenue of $59.4 million. So that's a 34.6% increase over Q1 2025, well above the 20% sustained growth threshold that the 100-bagger framework suggests.

We had $32.7 million in adjusted EBITDA at a 55% margin. And we've been in that 54% to 56% margin for multiple consecutive quarters. So that's not a 1 quarter number. And then there's the operating cash flow story. So in Q1 2025, we had negative $61.6 million in operating cash flow. And in Q1 2026, we had $91.7 million. So that's a $153 million reversal. A lot of that had to do with the LMA Income II Fund coming to the end of its initial term, which also reduced $76 million of debt off of the balance sheet. So the 100-bagger framework requires 3 things working simultaneously: revenue growth, expanding margins and strong returns on investing capital. And Q1 2026 was that framework in action with a balance sheet that's getting cleaner by the quarter.

In 2025, we built the foundation. Gross revenue of $235 million, which is more than double where we were in 2024. Adjusted net income of $85.7 million, adjusted EBITDA at $133 million at a 56% margin and return on invested capital and return on equity, both at 20%. And we ended the year with approximately $3.6 billion in gross assets under management.

On the right side of this slide is more of the forward look. So earlier this year, we increased our guidance -- our full year 2026 guidance to $100 million to $106 million of adjusted net income. So that's up to 24% growth on top of a year that we more than doubled the business. But beyond the headline numbers, we have an AUM target of over $5 billion for year-end. A lot of that is going to be driven by inflows into our longevity funds, where we had targeted about $500 million in the first half of the year alone. And we also have Abacus Intel revenue target of $3 million for the year as we begin to monetize the 2.8 million lives across 100 -- more than 100 institutional systems.

And then lastly, pushing our recurring revenue mix to 20% towards our goal of 70% fee recurring earnings by 2030. So the path to scale. So the path is going to be paved by catalysts that we've already put in motion. We're going to scale our longevity fund complex with new funds and larger vintages. We have our securitization platform as well as the newly launched interval fund that hopefully, you saw the press release on that a little bit earlier this week. And those are going to be creating repeatable execution and predictable AUM growth. And then there's the longevity -- I'm sorry, the wealth management build-out, which would include the Manning & Napier referral flywheel. And so those things are starting to build the fee revenue layer on top of the core engine. And so those asset-based fees, advisory fees and our technology revenue will move our total recurring revenue mix towards our long-term target.

On the right side of the slide, it shows the numbers along the path. So in 2025, we're at $135 million of adjusted EBITDA. By 2028, we expect to be at $250 million. And by 2030, we expect to be at $450 million as our AUM scales and our revenue shifts more towards fee recurring revenue. And we expect the margin profile to hold or improve because every dollar of AUM-based or technology-based revenue carries a structurally higher margin. So why is that important? Multiple expansion. So today, our revenue breakdown is Life Solutions is about 84% of our total revenue. It's the engine. It's fantastic. But by 2028, we expect that to be about 40% of total revenue and by 2030, 30%.

And to be clear, that's not saying that Life Solutions is going to shrink in total. It's just as a percentage of total revenue, it will be smaller because of the anticipated growth we're going to see in asset management, wealth management and technology, all of which carry a higher valuation multiple than Life Solutions revenue alone. And here's where it really matters. So we're at 16% fee recurring revenue today. Every 10 percentage points that we make towards our goal of 70% is an estimated 2 to 3 turns multiple expansion. That's not incremental. That's transformational.

On top of a return on invested capital backdrop of 20% at the end of 2025, which is well above our cost of capital, which means every dollar we're reinvesting is compounding at meaningful spreads. So the 100-bagger framework requires compounding, compounding revenue, compounding margins and compounding business quality. The platform that we've assembled, LifeARC, our asset management business, the Manning & Napier Strategic Alliance and Abacus Intel are all strategically designed to deliver on all 3.

And before I hand it over to Elena, I just want to -- I want to leave you with this. We're delivering strong results. Our trajectory is clear, and our compounding business is just getting started. So I'm now going to hand it over to Elena, our Chief Investment Officer, who will be our host for the rest of the day. Thank you.

Good morning, everyone. I'm Elena Plesco, Chief Investment Officer at Abacus Global Management. And I want to spend the next few minutes on something slightly different. Bill already given you the financial update. I'm not going to talk about fund management. We have a whole section on that. My job this morning is to help frame how we believe investors should think about Abacus. So the common mistake is to define a company by the most visible transaction it facilitates rather than the infrastructure underneath that helps facilitate enterprise value. So with that in mind, we'd like to walk you through what kind of company we're becoming. And I will start with a question. I'm expecting participation from the audience.

What is Amazon's largest revenue-generating business? That is incorrect. I was hoping -- I was planning to plan someone to say that, but I didn't need to. So the answer to that is still core commerce, selling goods. It's the oldest part of what Amazon does and clearly to a lot of you and not a very exciting part. So now let me ask you a different question. What is Amazon's one of the most important profit centers? And that answer is AWS, yes. Cloud infrastructure, a business that did not even exist for the first decade of the company's life. And here's what I find instructive.

AWS did not come from a strategy offsite where someone decided that Amazon should become a growth company. It came from e-commerce. Amazon needed to build technology infrastructure to operate its own marketplace at a massive scale. And over time, that infrastructure it built for itself became valuable to companies far beyond Amazon. The core revenue engine funded and necessitated the infrastructure that became one of the company's most important profit centers. So that is the lens I want you to use for Abacus. I know people were asking me, is there going to be an analogy? Yes, this one.

So today, origination is our largest revenue engine. It's bringing policies, bringing clients, bringing data into the ecosystem. It is the oldest part of what we do, and some may find it not very exciting. But origination is exactly what allowed us to build LifeARC. We did not wake up one day and decided to bolt on a technology story. We needed better data, better mortality insight, better verification and better pricing. We needed tools to understand how long assets may last and how to think about individuals longevity. So we built those tools. And just as with Amazon, the technology that we built from an internal need is now becoming a business in its own right.

But before I get to that, and we will talk about LifeARC a lot today, let me frame the company itself. Depending on when you -- where you enter our story, you may think we're an origination company, an asset manager, data provider, a wealth platform, a technology company or some sort of business connected to insurance assets. And there is truth in all of those descriptions. But none of them really capture the full picture. The mistake would really be to look at one part of Abacus and assume it's the whole company. And you've heard us talk about the flywheel a lot, and we will continue talking about that more today.

But I want to touch on 2 concepts that sometimes get used interchangeably. So the rails are what we own and the flywheel is what happens when those rails reinforce one another. So what we're actually building is the infrastructure for lifespan-linked finance. We're building the rails. So origination brings assets, clients and data into the ecosystem. Abacus Intel through LifeARC turns that flow into personalized lifespan insights, verification, underwriting and pricing. Well, the Manning & Napier turns a consumer liquidity event into a long-term planning relationship.

And lastly, asset management turns our proprietary access and underwriting discipline into institutional products and fee-paying AUM with our new parlay into ABF really extending our runway into the broader asset-based finance space. And not to forget about distribution because that moves products, relationships and capital, both domestically and globally. So origination is how assets enter our system. Distribution is how capital enters, and you need both to create liquidity. Later on today, you will hear from Corey, Monty and Martin on all of those pieces of the business.

So why is it that owning the rails matter? Well, the more rails we own, the more we control our own destiny. A traditional asset manager oftentimes relies on third parties to bring them capital and even product. A traditional originator has deal flow, but frequently fails to capture the downstream economics. A traditional data business has analytics but lacks captive assets. And a traditional wealth manager owns the client relationship, but fails to provide any proprietary insight. Well, as for us, we do not wait for someone else's deal flow, and we don't rent someone else's data. We build the rails, so we would like to set the terms. And in the Abacus flywheel, those rails allow us to do a multitude of things such as provide consumers with liquidity, put forward institutional-grade products and build recurring economics for our shareholders.

We built the rails and the rails are what made LifeARC possible. And LifeARC is not just simply a product that sits on top of our platform. It is really the intelligence layer that we have been building towards. And I just want to kind of like caution you, LifeARC is not an insurance tool. It came from insurance, just like AWS came from inside of a retailer. But what it actually does, it turns lifespan into a personalized quantified financial input. And lifespan should not be an insurance variable. It really is the missing variable in nearly every financial decision a person makes.

So think about how we build portfolios today. We have spent decades getting really precise about risk, return, correlation, volatility, like we've modeled markets to the basis point. But when it comes for the most important input in any individual's financial life, we reach for an average. We solve a deeply personal 40-year problem by applying the lifespan of a population the person doesn't even belong to. That is the gap. Your portfolio is built for the average person, but you're not an average. Nobody is. And LifeARC closes that gap. It is the input that lets us build investment portfolios personalized for you around your lifespan. It is not a guess. It is personalized to how long your money actually needs to last.

So now every retirement drawdown, every annuity decision, every glide path, they all depend on one number, how long? Until now, that number was an average. LifeARC makes it curious. So once that input exists, we believe it really belongs in every single portfolio. And we do believe personalized lifespan will become a standard input in portfolio construction. And the company that owns most accurate, most defensible view of an individual lifespan will own the input that everything else runs through, and that's not simply a feature. That is real infrastructure.

So as you listen to the rest of the team today, I would encourage you to not hear each section as an individual business unit update. Each of them is a rail in the same system. And when those rails connect, the flywheel starts to turn. And that is the investment thesis, not one product, not one segment, not one transaction. The whole system is the thesis. And this system has been building towards the input that finance has always been missing. If we execute, Abacus does not merely become a participant in lifespan-linked finance. Abacus will become a company that is building the infrastructure that allows this entire category to scale. So the various parts of Abacus are, of course, interesting, but the platform is what matters. So please join us as we're building the intelligence layer for lifespan-linked finance. Thank you.

Now we will move to the more interesting portion. And I know last year, you have met a lot of our division leaders. This time, there will be a lot of new faces as well. So first up is Jeff Smith, our Chief Marketing Officer. Jeff has been with the company for almost a decade, I believe somewhere in the fall is his 10-year anniversary. And Jeff probably remembers the time when the marketing budget was probably what it cost to throw this event. And now he's in charge of million -- multi-million dollar ad buys, and he will take you through a lot of our AI and data strategy as well. Welcome, Jeff.

Thank you, Elena. On my first day at Abacus, Shane McGonnell our CRO, had to go down the street to our local Best Buy to pick up my first computer. At the time, as Elena just mentioned, my advertising budget was $100 a day. We had maybe 15 people in the entire office. That was 2016. We're now a New York Stock Exchange-listed company that originates over 100,000 consumer direct leads every year, has participated in billions of dollars of alternative asset transactions and is active in 4 unique distinct separate business lines, all in infrastructure that we designed and built ourselves.

Now at the outset, I want to clear something up. My title is Chief Marketing Officer. But that word marketing doesn't necessarily do a great job at telling you exactly what we do at Abacus. We integrate marketing and operations by design. We build tools that improve close rates, not just lead volume. We own the attribution infrastructure across TV, digital and radio. And right now, together with Armando Cabrera, who you'll hear from next, I'm co-leading a complete digital transformation of all of our companies and merging them into a single data infrastructure that allows us to do things with data and clients that weren't possible in the past.

And that may not be where your head goes when you think about marketing, but that's by design. And one principle we consistently come back to every time we're planning or building any tools like this is the same thing. We don't borrow tools. We build them. That's been true in marketing since day 1, and it's what I want to show you here today. The way I think about marketing is as a revenue engine, not a cost center. In most organizations, marketing and operations are separate roles with separate functions. Marketing generates leads, creates interest in the business. Operations handles everything that comes next.

But at Abacus, we made the deliberate choice to integrate the two. Increasingly, those integrations are being handled through the use of AI. I'll give you one example of many, and we'll talk more about AI in a little bit. But right now, when a lead enters our system, machine learning is working instantly, scoring that lead, enriching all of their data and routing them across every single one of the companies in our umbrella to find the best possible chance for a revenue-creating event. It used to take a human hours, days, might not even happen at all, now happens in seconds. And the best part about that is it's not a future state. That's how we operate right now.

And operational integration is what makes that model work. And it's what allows us as a marketing department to do something most companies can't. We're able to connect every single dollar we spend to a specific outcome across all of our business lines. And before I go too far into the future state, I think to understand where we're going and where we are today, it would help you understand where we started. When I started at Abacus, the job was pretty straightforward. Generate business, don't spend much money. Over time, as we continue to approach the foundation, which involved doing the SEO work, hunting down media placements free as often as possible and building out the brand, we proved out what worked with the model.

And as we generated leads, generated revenue with that model, the budget increased. And as the budget increased, we were able to spend more intelligently. And one of the ways that intelligent spend actually materialized for Abacus was through the construction of proprietary targeting algorithms with our own data. So that means without relying on any third parties, without bringing in other data sources, we took 20 years of Abacus' data and built targeting algorithms that allowed us to generate business at a fraction of the cost of our competitors. We're still using those algorithms today. And every new lead we get, every phone call we make, every e-mail, every piece of client data further informs those algorithms and makes our spend more intelligent. The key insight from those early years was that every piece of infrastructure we built, we built to last.

Now I want to go into the thesis that I've been driving for this fiscal year because I think it shows one of the ways at least, the vertical integration creates value in our business. The goal is simple to state. I never want an unqualified lead. Now that obviously doesn't mean that every lead that comes in through every channel needs to qualify for exactly what they expressed interest in. But what it does mean is that across 4 business lines, we should be able to find a fit for every single consumer who raises their hand. And I'll give you an example of that. On the Life Solutions side of our business, someone might express interest in selling a policy. But often, those leads don't qualify. We have a very specific buy box. But what we know about that lead is they expressed a dissatisfaction with their policy in some way.

So what we can now do is have the conversation, connect them directly to AccuQuote, for example, where they might be a perfect fit or take a wealth management client, for example. We're now engaged in conversations with that individual across their entire financial lifespan. Products like LifeARC, Life Solutions, really every part of our business will come up over the course of those conversations. The verticals feed one another, but only when the infrastructure exists to enable that. That infrastructure is something we've spent the past several years perfecting. And with our unified data platform now in place, we're able to score, enrich and route leads in real time. We generate over 100,000 leads a year. The question has never been, can we generate them? The question has been across 4 business lines, how can we turn that volume into real revenue for all of our companies and not just one.

Now I'm going to talk about AI. I mentioned it earlier. And when I talk about AI, I don't mean plugging into someone else's models, licensing a chatbot or bolting a preexisting vendor tool onto a process we're already doing. When I talk about AI at Abacus, I mean machine learning models that we built with our own data. I mean agentic automations that we built for our own workflows and tools that we own outright that don't rely on anybody else's models or any form of third-party data to operate. Now distinction matters, and it matters for the same reason that our first-party data strategy matters.

Ownership creates a moat, and that moat gets harder to cross every single year. And here's what that looks like in practice. One example is AI voice, which has effectively extended our operating hours by 16 hours a day and a full 2 days a week. In the past, when I run a national broad -- national prime time television campaign, most of that interest is generated in the evening or over the weekend. But our call center operates 9 to 5, Monday to Friday. AI voice effectively closes that gap. And we're now able to meet consumers where they are, no matter when they reach out. It doesn't matter if it's in the middle of the 4th of July weekend or at midnight. That effectively introduces them to our pipeline instantaneously and allows us to start actually acting on that client much faster than we did in the past. So leads no longer go cold overnight or during a long weekend.

But AI voice is just the most visible example of something much deeper. Origination is becoming effectively more data-driven and AI-enabled across our entire platform. We're using AI to identify needs before consumers even raise their hands. We're utilizing better segmentation, more personalized outreach and serving them relevant education at exactly the right moment. We're also ingesting more signals than ever. And we're using those signals to generate higher intent consumers, reduce friction across our pipelines and better equip advisers to make decisions immediately. The end result is a better equipped adviser on the backend and a more qualified lead entering our system.

We've also deployed AI agents across the entire spectrum of our business. That includes case processing and making it more streamlined. That includes automated fraud prevention. It includes things like internal LLM-powered chatbots that we use on all of our websites that we built ourselves and aren't reliant on another model. The true line across all of this is that we built it. And the important thing to take away from this is that marketing isn't just advertising anymore. It's a scalable education and acquisition engine that makes every single aspect of our business more productive.

Now I want to walk you through media strategy because I think it's a little bit different than how most companies handle it in our space. When I consider media strategy, I focus on intent capture and intent creation. Intent capture is what you probably think about when you think of platforms like Google, Bing, Yahoo!, maybe meeting people directly in their inboxes. Increasingly, that means ChatGPT, Gemini, Claude. It's showing up when a client is expressing interest in your brand and being the best possible option at that moment. And what we find here are people that are searching for our space or people that are tertiarily related to our space within 1 to 2 degrees of separation.

So when you talk about next of kin, when you talk about people that look like a good fit, that's what this looks like. It's inherently data-driven. It's very efficient spend, and it creates really high-quality leads that close at a really great rate. So hearing all that, you're probably thinking, great, that's where we should spend all our money. You're telling me the leads are attributable, high quality, easy to generate, great. The problem is intent capture is inherently finite and self-limiting. There's only so much demand in the space. You can only capture so many clients. That's where intent creation comes in. And that's when we talk about things like the national TV campaigns, the radio buys, even things like billboards or brochures.

A lot of people would usually call this traditional media. It's a little more expensive to originate. It's a little less efficient, and it's very hard to handle attribution around that space, sometimes impossible in some cases. But it does something that you can't replicate in any other way. It creates demand, it builds intent and it drives consumers to our platform in a way that nothing else can. And in that way, it actually makes our intent capture model more efficient and makes it more productive because more leads are coming into our space. So we're taking a spend with some weaknesses, driving it into a spend with a lot of efficiencies.

And in that way, interestingly, the more money we spend on TV, typically, the more efficient our spend becomes in gross. The strategy for us was always to build intent capture first, perfect it, capture every consumer that enters our space and always be the best option and then and only then move into intent creation. You don't build the fire before the fireplace is ready. And that's why you didn't see Jay's trademark sweater on TV until 2023, not 2016.

Now I want to take a step back and talk about how everything we've talked about today actually connects. Some of this will be a rehash because I think it's important that we bring it all together. Abacus operates across 4 business verticals. And the question investors reasonably ask is, how do those 4 business verticals actually complement each other rather than just operate alongside one another. The answer is the operational spine. As previously mentioned, we recently completed a full refactor of all of our separate operating environments, bringing all of our disparate data points into a single source, every lead, every client record, every transaction, one environment. Now what does that actually mean in practice? It means that when a consumer enters our system through literally any medium, we can now score, enrich and route that lead in real time across all of our businesses to find the best possible revenue-generating result.

Now I want you to take a second to think about what happens, for example, when we facilitate a Life Solutions transaction. Let's just say $1 million policy that we purchased for $250,000, just for illustrative purposes. That's money in motion. And the question we can now reasonably ask because we have the infrastructure to ask it is, does the client have a plan for that capital? What happens next for them? Usually, the answer to those questions is they don't know and know. But now with the infrastructure in place to properly facilitate all of these things, we're able to meet every single consumer exactly where they are.

I started at Abacus with a computer, Shane McGonnell got me a best buy, a $100 a day budget and a blank whiteboard. What we've built since then isn't just a marketing department. It's a proprietary data and origination engine that generates over 100,000 consumer direct leads a year, routes them intelligently across 4 business verticals and helps to dig the competitive moat that gets harder to cross every single year. Under Jay's leadership and with the support of my incredible team, I've had the privilege to expand on what it means to lead marketing at Abacus.

Thank you so much for the opportunity to talk here today, and I'm excited for what's next.

Up next, we call Armando Cabrera.

He currently serves as President of Abacus Intel since you saw him last, he got a promotion. And as you may recall, he is really the mastermind behind every technological piece Abacus has put in place. He will also be joined by Dr. Jay Olshansky, who's our Academic-in-Residence. I will not attempt to read his entire bio, but Dr. Jay Olshansky is one of the world's leading experts on aging and longevity and biodemography, sorry, English is my third language. For more than 4 decades, his research has shaped our understanding on lifespan, healthy aging and the outer limits of human life. Dr. Jay Olshansky is a very prolific author with dozens of papers. He has been collaborating with a numerous amount of business entities and entities in academia, and he also currently is the Professor Emeritus at the University of Illinois, Chicago.

Thank you, Elena. So you're going to hear from Dr. Jay a little bit in a second. But today, we're going to talk about the foundation that LifeARC is built on. We're going to talk about the development of LifeARC and how it actually works as well as the applications we've been seeing in our business as well as in the future. And after that, we're going to have a quick MVerify update and discussion on our mortality database.

So first, what is the foundation that LifeARC is built on. We talked a lot about the data that we have and something that we've been aggregating over the last 20 years. But let's think about in our core business of life solutions, when we're purchasing an individual's life insurance policy, what information is needed? Well, we need to get the medical records for this individual to understand their impairments, all the comorbidities that they may have to understand what that asset may look like and what the duration may seem. So from there, we've aggregated millions and millions of pages of medical records that help inform our models. But it's not just the medical record data that we have.

In addition to that, we need to be able to attach real outcomes to the individuals we've seen over the past 2 decades to understand what the true lifespans they actually experienced. And with that, that's where our mortality verification, mortality database or MVerify yields results for LifeARC. But it's not just the data. The data is a vital component, but something unique we're also able to do at Abacus is provide expertise that no one else in the market has. You heard Dr. Jay's Bio. When we look at our data, we're not just simply putting a model or a machine learning model or AI on top of it and hoping for good outcomes. What we're doing is we're applying longevity expertise to help interpret and understand the context that this data is in. So things like understanding why certain outliers occur and adding nuance to scenarios that no model can understand. This allows us to take our data to the next level.

But now what's the last set of expertise that we have here at Abacus? Well, today, we've talked a lot about accurate lifespans and the fact that LifeARC can produce accurate lifespan estimates. But when we use that word accurate, what does that mean? Think about that for a second. When I say our lifespan estimates are accurate, how would you define that accuracy? Just take a second to think. I'm thinking too. So I think the answer is very dependent. But let's say for an individual, they have a 10-year lifespan that we estimated and they live 10 years. Would you say that was an accurate estimate? I mean I hope so. If you said, yes, I'd agree.

But that's not the world we live in. What if that individual live 9 years, maybe 11 years, maybe 15 or 20. At what point do you say that is no longer an accurate estimate and that accuracy falls off. And I think the asset management expertise that we have at Abacus allows us to answer that question a lot more intelligently. So if you think about our core business, when we're purchasing life insurance policies, we may want to optimize our models based on a different factor than we will for in the financial planning space. The most sensitive area of cash flow in a life insurance policy and when affecting the value of that policy is in the early-stage mortalities.

So maybe instead of optimizing on the midpoint or the lifespan of an individual, we will optimize the precision in the early years of their survival distribution. But that question kind of flips when you ask an individual, what are they most scared about in retirement? And if that fact is running out of money, do we really care about the midpoint or the early-stage mortalities as much as we do as the worst-case scenario for them. So instead, what we can do is we can apply this expertise to optimize the models based on these 90th or 95th percentile that give our clients in financial advising, the confidence that the data that they're seeing is accurate and precise. So the data that we have builds that foundation and the expertise we apply sets us apart as well.

From there, I'm going to allow Dr. Jay to kind of go into the predictability and longevity science behind lifespans, and I'll continue after that.

All right. Well, thank you very much for having me here, by the way, it's an absolute honor and a pleasure. I'm actually going to be brief. I have one slide with almost no words on it. So I do like to keep it simple. And I actually want to emphasize something that Jay Jackson said earlier, which has to do with this issue of healthy life. So 4 years ago, I testified before Congress on this very issue of manufacturing healthy life and as it turns -- and which is what aging science is all about, and as it turns out, there's a direct link between how well you deal with your finances during the course of life and how much healthy life you can manufacture later. There's a direct link.

So a lot of this concept of a LifeARC, which gives you a sense of where you're likely to be headed in the future is extraordinarily valuable. So this looks like a pretty esoteric figure here. It's actually not. So what you're looking at here is one of the most famous lines in public health, in epidemiology in a variety of different scientific disciplines. About 200 years ago, an actuary by the name of Benjamin Gompertz came up with a formula, a very simple formula that described the dying out process of humans. It was pretty simple, depending on how old you are, what's your risk of death. I mean all of you have been using the Gompertz formula, believe it or not, even though you're probably not aware that you have been using it, you have been using it for quite some time and it's fairly simple. The risk of death for humans doubles about every 7 to 8 years.

That line there, which, by the way, is on a semi-log scale. So right, it's a log scale vertically, arithmetic horizontally, which means when you see a straight line, that is a definitive explanation for an exponential increase in the risk of death. So in humans, the risk of death doubles about every 7 to 8 years. It has never changed in human history. It likely will not change in the lifetime of anyone in this room. So what did we do? We took all of the Abacus data from the last 20 years. We wanted to see how valuable that database actually is. Fairly straightforward exercise. We uploaded all of the data. Did it fit the Gompertz Law of Mortality? Well, the green line is the Gompertz Law of Mortality and the red dots represent the Abacus data.

What does that tell us? It tells us that the Abacus database is extraordinarily valuable. It can be used to help predict duration of life at the individual level. It can be used in a variety of industries, for example, in wealth management, it's sort of perfectly suited for that purpose. And keep in mind, at the individual level, of course, let's just say you're looking at age 85. We know that some people have a lower risk of death that's going to be below the line and some people have a higher risk of death that's going to be above the line.

LifeARC is designed to determine where you are on that distribution. It's not -- nobody can determine definitively, exactly how long you're going to live, but we can come pretty darn close to figuring out which distribution you're likely to be in and that's indicated by those green lines in the upper right-hand corner. At the population level, we've got very stable data at the individual level. You need more personal information about individuals. That's what you heard Armando talking about earlier. So we've created what -- and I like using imagery, by the way. We've created a number of knobs that we can turn that give us a better sense of how long individuals are likely to live. The more information you put in there, the more knobs we can turn, the closer we can come to figuring out how far above or below that average you are likely to be.

So we've actually created what I refer to as a gold standard set of life tables, Abacus set of tables that are designed to help us determine how long individuals are likely to live. And it's an extraordinarily valuable resource. It's particularly comforting that all of the data follow the Gompertz Law of Mortality. I would point out, by the way, that we've demonstrated definitively over the years that this trajectory has, in fact, never changed. But the fact is, is that some subgroups of the population do much better than others. For example, individuals that are wealthier, more highly educated tend to be on the lower side of that distribution, lower mortality, longer life, individuals that have more challenging health conditions are on the upper side of that distribution. So I'm just trying to emphasize the importance and the value, which is -- of the database that Abacus has in hand, and it will grow more valuable with time. I'm going to stop there. Thank you.

Thank you, Dr. Jay. So now I want to emphasize the point that we've kind of reiterated today. LifeARC is not something that's new to Abacus. LifeARC is something that's been powering our core business for years now. When we think about acquiring life insurance policy, what is one of the key inputs? Well, we need to understand the risk profile of an individual and how long they're expected to live. LifeARC has been powering us to make smarter acquisition decisions on these assets before we buy them. Then once we own these policies, what does it help us do?

Well, as we continue to aggregate more data and more medical records for a given individual, it allows us to make more intelligent sell or hold decisions on the assets we actually currently own. And this sets us apart in the market as we have additional data that we can then utilize to manage our book more efficiently. But now we're stepping into a new frontier. And that frontier uses the exact same engine of LifeARC that we've been utilizing for years. That engine is the same. That same point you need to value a life insurance policy is that same data you need to use to create the most educated and intelligent financial plan for every consumer.

And again, Jeff said it, and we've said it before as well. These are not licensed or leased products or data that we bought from anybody else. This is data that we've been building for decades, and this allows us to have no third-party dependencies, and it's something unique to us. This cannot be easily replicated. So now as we shift focus, how does LifeARC actually work? Well, let's think about some of the data that we have. If we look at the medical records that we have, what do those really look like? Well, a lot of times, it's going to be scanned digital PDFs. Maybe it's going to be a scanned paper document on somebody's phone. Maybe it's doctor's handwriting, which might be a little bit more difficult to read, at least for me.

All of this information exists in an unstructured format that's not usable for any modeling. So what is our first step? Our first step is to ingest all of this unstructured information and use natural language processing to understand the context around all the medical records as well as optical character recognition to read somewhat unreadable doctors' handwritings or scan PDFs to allow us to put this in a central structured database. And that sets the foundation for our models.

Once we have our central database, we now have to think about what makes an individual unique. What factors about an individual allow us to understand their unique life. So simply put, maybe we're going to extract features such as gender, maybe we're going to get age. Those are more of the simple ones. But then let's think a little bit more complex because the human population, especially in the U.S. is very complex. We're going to need things like how many impairments do they have? What is their most severe impairment. But not only that, what is the progression of that impairment over time. These are just some of the hundreds of features we're extracting from our central database to create an accurate model. And this model, again, I talked about accuracy, and it depends on the context. This model produces accurate lifespans and a point estimate, but also a distribution of survival for that individual.

Additionally, we're also creating a clinical summary that is easily interpretable for both financial advisers and clients to understand where does their lifespan come from and where is the scientific backed research that justifies this in addition to our data. But not just that. LifeARC is not static. Your LifeARC is an arc of probabilities, just as Jay has said. And as your LifeARC continues to grow and you have new investment goals or you have new medical impairments or medical records, LifeARC updates with you and in real time. We not only adjust for the real-time trends we see in the population, but also with the data that's specific to you. This data is so vital to you and it's so hyper-personalized that nobody else can recreate it and it constantly updates no matter what happens in your life.

And you might say, Armando, "wow, wow," you're talking a lot about how LifeARC works and what you guys did to develop this. Aren't you a little bit scared? Isn't that your secret sauce? And to that, I would say, if I bundled our models and created our complex models and gave them to you today, you're going to have a great lifespan estimator. But in a week, you're going to call me. You're going to say, look, this has been working great. And I'm going to agree with you. I think those models are great. But you know what, you're actually a week behind us now. And why are you a week behind us? Because the infrastructure we've built allows us to capture the data that's occurred. There's been a week more of medical records we've aggregated, a week more of real mortalities that could affect trends that are affecting each individual. This information sets us apart. We're not just data. We're the infrastructure to aggregate and analyze that data.

And so what does LifeARC look like now and in the road ahead? We've said it a bunch. We want to be the intelligence layer of financial planning. We're going to be the AI and data tool that advisers use to educate their clients on one of their most important inputs to their financial plan, their lifespan. So as we look at what we're doing, we've had a lot of excitement around LifeARC, several meetings and several integrations that we worked on and LifeARC was built to be modular. It was built to meet a client or adviser at every phase of life. So we can integrate with seamlessly into existing wealth management platform so that advisers can use our information immediately and without adjusting their workflows. But we've also built a proprietary platform where if you want more detailed and interpretable results, clients and advisers alike can log in and see where the lifespan comes from and how it's generated.

In addition to that, LifeARC, as I said, is not static. The mortality data that we aggregate on a daily basis continue to feed the models and create the most up-to-date information without the need of actuarial estimates or studies that could take years to occur. And so I think that yields us into a good transition point to talk about MVerify or mortality verification. So MVerify is our product that aggregates the deaths that occur across the United States every single day. We boast a 97% national coverage as well as a less than 1% false positive rate in the deaths we report. So MVerify isn't just an internal product. It's something that we also sell to hundreds of clients, as I think Bill had mentioned earlier.

And so what do these clients look like? These clients are usually pension funds, unions or life insurance companies. And MVerify allows them to prevent fraud and overpayments when an individual passes away to stop their pensions as well as for life insurance companies to either stop annuity payments or pay faster life insurance claims. And if we think about it's not only the data that MVerify has, but it's also the speed to that data. Normal state databases can take 2 to 3 months to report deaths, whereas MVerify usually does it within the first week. And so if you can see here, we've made significant market penetration. We've over doubled the amount of lives we've been tracking since Q2 -- since Q1 of 2025. And why is that important?

Well, MVerify is a subscription-based product that our clients pay an annual fee for based on the number of lives we're tracking for them. And the reason why we're able to charge the subscription-based model is because as mortality events occur every single day, we continue to add value to our clients. But just think about the technology we've talked about today. Everything we build at Abacus is extremely intentional. If we think about why are we incentivized to build a better mortality verification product. If you ask yourself that question, well, we have a whole servicing division that focuses on finding when individuals have passed away and getting our life insurance death benefits quicker so we can rotate our capital sooner. But not only that, MVerify feeds directly into LifeARC, just as we've talked about today. And so whether it's LifeARC or whether it's mortality verification, everything we do is built upon our core and has continued to grow and create a scalable future for Abacus. Thank you.

So I'd like to invite back Jay, Bill, and they will also be joined by Jim Morrow, CEO and Founder of Callodine Capital. And for the next few minutes, we will do a panel on wealth planning. Thank you.

We were just going to have Bill talk about this, but I thought it would be way more fun to crowd his party. So I'll start. For some of you who attended our Investor Days in the past, we are always honored and excited to have James Morrow with us from Callodine Capital. And you've got an awesome history. I did learn in actual meeting with Mr. Peter Lynch that you were assigned to him or how did that go? You were with Fidelity for what, 17 years, right?

18 years.

18 years. $50 billion in AUM and equity income fund. Yes, that's fine. But then like you were -- how did they do that with the mentor, right? Because Peter Lynch is there, right?

I started as a summer intern. And when I got hired full time, they assign you a mentor.

And they're like, your mentor is Peter Lynch. Okay. No pressure. That's a pretty wild way to start your career, I spend a lot of time with them. That's super cool. And Jim has made investments in all kinds of industries and businesses and runs what I believe, one of the top hedge funds in our country and has grown exponentially. And he has a unique outlook on not just Abacus. Now I do have to say all hands on table. His funds don't have any type of ownership, but was part of our original IPO when we went public and has some shares at the corporate level. So and with that said, one of the things that we get to do is I get to engage and get perspective from people like James Morrow on -- how do we think about the opportunities that we build, like LifeARC.

And when we first thought about entering the vertical of wealth planning and what that might look like, we knew we had to have some kind of key differentiators because as a market maker in the insurance side, which you just heard from Armando, what would this look like? And how do we capitalize? You heard from Jeff, on all the leads we generate, how do we capitalize on those?

For us, this flywheel was incredibly important to be able to say we can monetize this in other ways in a very thoughtful and intelligent way, but it didn't happen overnight. Bill's background, for those of you who've heard some of this, yes, he hasn't just been with us for 6 years, but Bill was the CFO of TransAmerica Financial Advisors, right? I got that one, right? Different financial roles with John Hancock and also was at McKinsey and that experience he had at TransAmerica Financial Advisors thinking about kind of where these products may or may not actually fit.

So Jim, I will start with you. When you think about some of the things you've heard today, specifically around LifeARC, the scalability of that market, and I threw around a number, $124 trillion wealth transfer. What does that typically mean? Like when you look at companies and you say, hey, there's like big opportunities here. How do they -- where do they fit? Like is it important to be the guy selling it or the person building it?

Yes, I think both. I think building it and leveraging what you've built is sort of the key value proposition. And I think markets in general and humans in general have a hard time differentiating between linear and exponential sort of change. And I think your original core business, $250 billion a year of policies that lapse that you can address, that's an amazing opportunity. 5% of what you described is $5 trillion or $6 trillion, right? That's exponential change in the opportunity set and your ability to create recurring revenue models around that, changes the story of Abacus and from what it is today to what it can become in a way that's really hard for markets to understand and appreciate.

So it will take time. You'll compound over time with that story. But that type of rate of change is one of the things that Peter always talked about is that the market usually struggles in that moment to fully grasp, right? And everybody is obsessed with AI right now and everybody knows about NVIDIA and other things. That's the building of the infrastructure. The ultimate winners will be companies that can apply that technology. And I can't think of a bigger market than $120 trillion to apply that kind of technology against with proprietary data. So that's the real change that the market will have to absorb and price in over time.

And when you think about it over time, you see this happen often, like over time in mindset from your perspective, like when they start to price in not just on the Abacus stock, but you think about some huge players in the wealth market who are talking about this. Like I said, I was on stage at the Milken Institute, with JPMorgan and the Milken and HSBC. And their primary focus was on product to address this. And I think what we were trying to talk about was some customized solutions, like how long do you think until when the market looks at something like this and they start to see, hey, we should start to adapt it. What do you typically see in those cycles?

I was told never to give a price estimate at a time. But time is tough. I mean markets -- it can ignore things for a while and then suddenly price them in. But again, if you think about wealth planning and you think about asset allocation, right now, that whole process in an enormously attractive industry is missing an incredibly important piece of information is like how long am I planning for. And so I think that addressable market for LifeARC is just -- I don't even not quantify it, quite honestly. It's sort of like, well, that's a really important input to that process that I'm missing today. And can you capture that market with a host of advisers that are out there that all of their clients will benefit from that knowledge. That's a pretty -- it will take time for it to penetrate and when the market recognizes it is hard to say.

That's interesting, too, because we've talked about, if you think about $124 trillion, 5%, that would be amazing as a market share. Was that, Bill? What was that about $6 trillion. Yes. That's what's super interesting. I'll tell you what I found interesting about LifeARC was that one of the outputs you saw, specifically in our case example, we have lots of these now. And let's be clear, we are literally generating converting leads like the one I showed you, that person's policy who had $8 million of liquidity and net worth, you know what their policy size was that we purchased, $300,000, right? So this mindset of, oh, they only have a $300,000 policy, therefore, they must not have a lot of net worth.

But I still think the thing that I really excited him in the end, like and he was so fun because I don't need 316, just give me 200. It was like, oh, okay, well, 200 is the number you're taking 160, so great. But the fact that's a 25% growth to legacy, right? So when you go to the $120 trillion, and we're going to add 20% to 30% of additional value to that wealth transfer. We can all do the quick math. That study was done by Cerullo & Associates who came out in very conservative asset allocations.

When you add what LifeARC brings, LifeARC actually brings another $20 trillion to the transfer. $155 trillion is actually what LifeARC, we think that wealth transfer will be. That's what I think is so unique about that. And Bill, you're TransAmerica Financial Advisors. Think about going back then, like some of the things that you guys were selling, some of the products that you're representing in both insurance and financial planning, how do you think LifeARC would have impacted?

It would have been a game changer. I mean you just think about all the different things that are impacted in the financial plan by the length of time that you need it. So I mean, obviously, duration, but like how are you going to structure retirement income, how much you need to reserve for just long-term care. It's just -- it would be a complete game changer. No one is doing this today.

When you sold the TransAmerica bid, you sold that, right? You were part of...

We sold the majority of it, yes, to John Hancock.

To John Hancock, right? How much would the price would have gone up with LifeARC. Imagine that. You can go back to your TransAmerica friends and say, hey, I could have made another $100 million if you had this program. right?

Absolutely.

Yes. It's -- but that is, I think, one of the things we're talking about fundamentally, like it doesn't just add value to what we see is, of course, the underlying client, but if you can add value to the company who adopts it, I think that's -- and that's why I'm hoping we see this. And Jim, back to you for another kind of thought process around this. When I look at this, how we kind of price in a LifeARC model so that it can be adopted, like one of the things we've talked about and Matt brought up serial acquirers, we are arguably serial investors for sure. And with what we've been able to make a minority investment in a group like Manning and Napier, could you maybe give some just maybe macro viewpoint on the impact to Manning, the impact maybe that you see in like a company like Abacus and then what that might look like for the whole market?

Yes. I mean it's hard to even quantify if you can help grow a firm's assets organically 10% or 20% with an adoption of the technology, just to put that in perspective, in the wealth industry, that may represent 5 or 7 years of organic growth that can be captured. And that's an enormous value add. And so how do you think about coming to market with that data and that information and that acceleration? And how do you share in that success with both the firm and most importantly, the end client, I'm always struck by like this is sort of one of those rare wins across the board that people can access wealth that may be trapped inside of a life insurance policy and get to enjoy that themselves and with their errors before they die, like that's really important to people.

That's your time to enjoy what you've accomplished or what you've accumulated. And so I think for any wealth firm, that's just an enormous opportunity that is dormant today. Everybody is working hard in the industry. Everyone is trying to add value for clients. This is sort of a new arrow in the quiver, right, to be, hey, we never talked about this. And you get a natural engagement with Gen 2, which is the holy grail, right, of wealth management. How do you sort of move to have a relationship not just with the individual, but their errors. And so it's an incredibly exciting technology for the industry to look at.

We feel the same. And now, Bill, we're talking about how we best price this, right? And we can talk about some of that. I mean it's -- there's a couple of different mindsets around it where you do like a per life and say, hey, here's a dollar amount that you might charge per life. And we talk about understanding the value, right, of what this brings to someone. And I remember an old quote that I had heard that said, cost is only important in the absence of value. And I think it's one of those things, right?

Like when you look at industries in the past that do very well, people are always going to pay their electric. They're always going to pay for these things to get updated medical information on an annual basis that most people never have, that's going to feel like something like paying, they say their cable bill, but now it's a different type of Google bill or whatever they pay.

But Bill, when you think about like the financial structure of this, I know we've talked a little bit about like how we build this into more of a revenue sharing model, if you want to talk and elaborate some of that.

Yes, absolutely. I mean I think this plays into our recurring revenue theme of -- we have a 70% target long term of having fee recurring earnings and just having this charge be something that's annual based on assets. I think that it just makes this time frame go even faster.

And I guess to add to that, too, I mean, to the sense of if you're accreting value, meaning we're adding 20% to 30% return, you just kind of measure that against your cost, right?

Absolutely.

So I'm not going to put you on the spot, but what are we thinking about? What are we going to charge? I mean your COO, CFO, I mean -- no, I'm kidding. I don't want you to say that out loud yet because we haven't rolled it out. But what I would like you to think about is that operationally -- what we need to do operationally to continue to expand that, what are our costs to run this, right, which is also compelling. And when you think about the margin on LifeARC and that part of our business, what does that look like?

Yes. I mean anything that's coming out of Abacus Intel and LifeARC, it's structurally higher margins. And so it's really improving our margins over time, which goes along the line of the 100-bagger framework.

I got them to say taking me 5 years to get someone 6 years, and get to talk about 100 bagger.

Jim, last question, and then we'll kind of wrap up. Businesses like this and how we're integrating flywheel, Elena highlighted, if you look at Amazon, and they were really good at establishing a flywheel that was infrastructure based. We all thought AWS. By the way, I answered AWS when she f answered -- asked me the question. I didn't realize. I was like, oh, okay, it's these other things. But it's the financial infrastructure sets you apart.

But what I find interesting, too, is the multiple expansion. We talk a lot about growing the business on revenue. Talk about companies that have kind of maybe even as Abacus and we're adding these types of verticals, what that potentially kind of looks like and how that impacts those things?

Yes. I mean the market is arguably obsessed with what are called incremental TAMs or total available markets that are very large as companies move through their natural life cycle. And what you're talking about is opening up a TAM that is many multiples the size of your current one. And you're doing it in a way that is in a model the market really resonates with over time, which is called -- you're building a data layer and a technology platform and then offering mass customization, right? And that's Amazon. We all have individual relationships with Amazon, right? They know what you want, they know what you order, they know where your house is, right?

Mass customization is what makes it such a phenomenal model. And you're talking about taking that and saying, I've got your individual medical data, I've got asset allocation frameworks and financial frameworks, and I'm taking that data and putting it together and offering you mass customization, a very custom plan based on an aggregate data. That's just a remarkable expansion in your business opportunity. And so the market will recognize that as it starts to play out. And multiples are hard to predict. But certainly, companies like that have been able to demonstrate that, achieve very high multiples if they can compound growth over time.

So first of all, thank you. Thank you both for your insight and input on where Abacus, as we talk about, is looking and we're targeting over the next 3 to 5 years. And I think Jim said something also very, very thoughtful and correct. We're not distancing ourselves from our core business. Our core business is a massive opportunity, lapsing north of $250 billion of paper every year and we grew $1 billion in AUM, just last year growth and lots of opportunity. When you look at what we put out for 3 years going forward, and we talked about this kind of, hey, what does 2028 look like? And what I tend to focus most on is I'm looking at $250 million EBITDA and what's that path there?

And at $250 billion EBITDA puts us, I think, very right in the center of where we trade at even at current multiples as a solid near mid-cap stock. And that's the growth you want, right? You want that path. And if you look at the path to get there and you look at the Life Solutions business, it's continually growing at 15% to 20% per year. And then you're talking about these other verticals, right? And what happens is that we have a clear path to that $250 as you consider the growth that we have in our core business and then you're adding on some really interesting fee-related earnings businesses that are recurring revenue through asset management, wealth management and things like LifeARC Technology, which will be a recurring business model. It's a very clean path to that $250 million. And I think that's what we're very excited about.

But the other side, which Jim just highlighted is that we also think that during that time period, the market will start to recognize a multiple expansion with it. And so then when you start to think about where pricing comes in, we'll be one of those, I think, very unique businesses that isn't just in a single position that people will look at this as almost a separate ecosystem and economy where people can capitalize on their financial advice, their planning and their solutions in a single location. And what we do know historically, as Matt will point out, markets pay significant for that type of business. So...

Amazon still sells books.

Amazon still sell books, and they sell a lot of them. I bought a couple, including Matt's. So I'll get as many plugs in for you as I can, Matt. Thank you. We appreciate it. Let us know if you have any other questions.

So for our next session, I'm going to do a little fireside chat with Samantha Butcher. We're going to get cozy. I'm going to do a fireside chat with Samantha Butcher. She is the President of Life Solutions. I think a lot of you do not get a lot of airtime with Samantha because she is busy making money, oftentimes at least 12 hours a day.

Enough people get airtime...

So we decided instead of having her just present on the industry, we'll make this a little more interactive. And for those who don't know, Samantha has been at Abacus for over 20 years, and it was actually her first job out of college when she graduated from University of Florida with a degree in math. And I guess, Samantha, before we dive in, like what -- how did you set to go to Abacus? You Were 22 years old.

It's funny. I was just maybe a little bit of a math geek who just wanted to find something that I could utilize that, but also be in the business sector. So that's how I started.

That makes sense. And actually, I don't know if a lot of you guys know. So before Abacus, so I was at KKR and longevity assets was one of the sectors that we started investing and I spearheaded that initiative. And very similar to Samantha, like that's what attracted me to the asset class because we do a lot of analysis in finance and most of the analysis like in that good. And with longevity assets, you can actually model those assets in a very, very detailed way. So I kind of -- in a very similar way that attracted me to the space. But like let's dive in. So I prepared a lot of questions for Samantha. I have notes. So I guess before we get into the numbers, maybe just walk someone what's the day-to-day in Life Solutions looks like? What does it do?

So let's think about Life Solutions and our typical client, right? We're speaking with 75-year-olds who have $1 million policies that they've been paying on for 20 to 30 years, right? And now they're in a part of their life where it's changing. Their kids have left, their house may be paid for or quite frankly, they can't afford the policy anymore. So normally, they thought they had 2 options. They could stop paying premiums and just lapse the policy or they could give it back to the carrier for what little surrender value it may have. But what they don't realize is we are a third option for them. Instead, they can come to us, sell their policy, get meaningfully more money than the carrier would give them. So that's the opportunity that we provide.

So from day 1, when they call, we help them from everything for gathering their medical records, looking at their underwriting, pricing the asset, helping them through closing and paperwork to acquire this asset. So that's what Life Solutions does. We find the policies, we price the policies, and we turn them into assets for these individuals. And everything you've heard today from Jay to Armando, everything begins because our department purchases the policy.

Awesome. So when someone hears that, like when I first heard that, it's like, oh, it's a no-brainer. Everyone should be doing that. And I think the statistics that we quote, there are $224 billion of policies that lapse every year and the market penetration is quite low. Like why do you think that is?

Well, you have to think of the market. There's $14 trillion of life insurance policy. But according to the Conning report, I think of that $224 billion was policies that would qualify for what we consider a life settlement. Yet last year, as an industry, we only transacted on $4 billion to $5 billion of life insurance. So that's only a 2% to 3%. Why is that? It's not demand. It's awareness. People just don't know that this asset exists. They don't know that it's their property that they can sell.

So to unlock that, you kind of -- you have 2 different things. Distribution is super important. And you heard Jeff talk about the marketing and the TV campaign, and we work with 30,000-plus advisers whose job it is to make their clients aware of this transaction. Next, we unlock it just with demographics, right? We have an aging community right now, 65 million over the age of 65. That's going to grow to 75 million over the next 8 to 10 years. So that's how we continue to build the funnel and unlock the value of those assets.

Awesome. And Q1 has been like a pretty big quarter for us. I think we've reviewed 24,000 policies total out of which like 9,000 were qualified. And I think as Jeff mentioned, like AI was a big contributor to that. So how do you think that trend evolves? When are we going to need more bodies? Is AI going to be doing all the work?

So AI is exciting, especially for what I do because if you think about us purchasing these assets, it's a process from when we first get the policy to the medical records, the underwriting and through the closing. And if you just think about the medical records, that has been a slow process. You're gathering hundreds of pages of records, you're analyzing them just to determine if this is a viable policy for our market. Now we're able to use AI to review those records in hours, not days. And why is that important? You have consumers that are in a part of their life where they just can't afford their premiums. They're looking at something where this money is going to be useful in their life. So the faster we can acquire these policies and take it through the flow of the acquisition, the better for that.

And then you think about AI, the bodies you said, that we're using to evaluate these medical records or underwriters that we need. Now we can do more policies over faster time with less people. And that allows us to buy more, but still maintaining those strong margins that we have.

And like to grow further, do you think what's the constraint? Is it capital? Is it capacity?

I actually don't think it's either of those. If you think about capacity, that's just an infrastructure that we're able to handle through AI and whatnot, capital, we're able to turn our book 2 times a year. So we just fund our own growth. I don't think either of those are the constraint right now. I bring it back to the awareness. That is what's super important for us to make sure everyone is aware of this, and we're able to capture that now with marketing.

That makes sense. And let's -- maybe I'll ask 2 questions that I think might be top of mind for our investors. So of course, earlier today, we've spent a lot of time talking about kind of like recurring revenue, how this is what we're going to calling Life Solutions, the least exciting part of the business, the boring part. So how do you think investors should really think about Life Solutions and the broader Abacus ecosystem?

So I don't think you should look at Life Solutions as a balance sheet business, but more of a flow business, right? And Jay said it earlier, we are the market maker. So every policy that we are acquiring, we are then trading either to our own asset managed arm, third-party institutional investors or through securitizations. So if you look at first quarter alone, we were able to realize revenue in real cash, not marks, not models. Life Solutions was able to do that. So when you're talking to investors who are looking at these models, they're seeing the real transactions and the real profits that we are able to do.

Obviously, like, Life Solutions very profitable, which allowed us to build LifeARC and do all the other fun things that we're doing because of the profitability. And a lot of times, I think investors ask me and when I was first looking at the Abacus model from my prior seat, it was like, wow, you make so much money. Someone else is bound to swoop in and compete with you. Like what do you think about that?

Just not that easy. So I think when you're thinking about, like you said, the margins, like why aren't people knocking down the door to get into this industry. And it's not that easy. You have a couple of different factors that make us successful in this. First, it's the licensing. We're licensed in 49 states. That took us 20 years to get here. Every state is different. They require different paperwork, different things we have to submit to them. And it's a slow process. Some states take months, some take years, and we've built that over the last 20 years.

Second, I think the data is super important. When you're pricing these assets, it's highly based on lifespan. And we have -- over the last 20 years, we have this proprietary mortality data that we use to price this asset. And if anyone comes in without having that, they could make some real costly mistakes real early. So data is super important. We look at origination. We continue to be the origination engine. And with the TV campaign and our relationships with our advisers, we've built a brand that people trust. This is such a trust-based transaction, right? You have 75-year-olds who want to trust their counterparty because this is a lifelong transaction. So we've been able to do that and build that origination. And last, it's the capital, and you have to be able to build the balance sheet and then trade the balance sheet, and we've been able to do that.

Definitely. And you saw earlier today, we were talking about how the rest of the business is going to look 3 years from now. How do you think Life Solution looks 3 years from today? And any other parting thoughts for our guest?

I think Life Solutions will continue to be a bigger engine on a bigger platform. So we've talked today about AI. That's going to allow us to be faster and quicker and acquire these policies at a cheaper cost. We're going to continue to be an origination engine and have these relationships and make sure clients are not continuing to lapse their policies. You have to remember, we are a market maker in a market that's right now only 2% to 3% penetrated, right? So our competition isn't everyone else out there. Our competition is the awareness. It's 90% of policies that are lasting right now because they're not aware of it. And if we can just bring 1% of awareness, we've already built the platform. We have the licenses. We have the data, we have the brand. So that's what makes me super excited and super compelled to bring this forward.

Thank you, Samantha, And for those of you who have not spent much time with Samantha, do catch her during lunch and ask her more questions.

Thank you, everyone.

So we will now move over to the asset management portion. Up next will be Corey McLaren. He's been at Abacus for 2 years now. However, he has been in the industry for over 20 years. He has been a portfolio manager at numerous funds prior to joining Abacus. And right now, he is the lead portfolio manager on the longevity funds.

Good morning, ladies and gentlemen. As you can see, I drew the short straw when it comes to portfolio -- or excuse me, presentation spots because I have to follow the difficult fireside chat, especially with Elena and Sam on stage, who always do a great job.

All kidding aside, though, we just had the opportunity to hear about how important our Life Solutions division is in driving growth at Abacus, about how we built this machine, this origination engine for sourcing assets, high-quality assets sourced in high volumes. But what are we doing with them? If origination creates the assets, asset management packages them in the most attractive way for investors around the world to access. And that's what I want to talk to you about today, how asset management drives growth at Abacus.

For those of you who don't know me, my name is Corey McLaren. As Elena mentioned, I've been with the firm for almost 2 years now, but I have over 20 years of experience working with the underlying assets. And I see a lot of you are probably thinking he doesn't look that old. And I appreciate that, but I am.

Abacus Asset Group is the fastest-growing vertical at the company. We have over $3.5 billion of assets under management with over $2.5 billion in our longevity funds and another $700 million plus across ETF assets. We have a suite of products that includes both onshore and offshore investment funds, separately managed accounts and securitization vehicles. We're launching new strategies like our asset-based finance strategy that Monty will talk about as well as an S&P-linked longevity strategy that offers investors some downside protection.

And if we're talking about new strategies, I'd be remiss if I didn't mention that we just launched our interval fund. The interval fund is the first registered access to lifespan investing. Think about how that will enhance our distribution capabilities. It will put us in front of a new audience. Individual investors and their financial advisers will now have a registered access point to our asset class, a registered access point to Abacus. So we're incredibly excited about that and all the new initiatives that we have. But for now, I want to speak about where we currently stand and what have been the biggest growth drivers for us from an asset management perspective, in particular, our longevity funds.

In March of 2025, approximately 15 months ago, we launched our premier and enhanced income funds. Those funds, unlike the traditional buy-and-hold strategies that the market had to offer, those funds pay quarterly distributions to investors, which proved to be very valuable. Over the course of a 15-month time frame, we raised almost $1 billion of new capital across those vehicles. In Q1 of 2026 alone, we saw almost $300 million of new capital inflows. And through Q2, we're tracking to be north of $0.5 billion. So we have tremendous momentum right now. But what do we attribute that to? Yes, we launched the new funds, but what is it that's generating so much interest in the asset class.

So for starters, the underlying asset has an incredibly attractive risk profile. There's a high degree of principal protection because remember, we're purchasing contracts issued by life insurance carriers. As long as we fulfill our contractual obligations, those contracts will cash flow. Those carriers will pay claims. And the carriers I'm talking about, they're A-rated, they're cash reserve regulated on a state-by-state basis. There is no more senior obligation for a life insurance carrier than the obligation they have to pay a death claim. And as a result, there's near 0 default history.

And on top of all that, the underlying investment has incredibly low correlation because returns are driven by mortality, human mortality, not interest rates, market cycles or foreign affairs. So it's an incredibly attractive asset to own. But let's take it one step further. What makes us confident in our ability to grow from $3.5 billion of AUM up to $5 billion or up to $10 billion and beyond? What is it that makes Abacus an institutional caliber manager? Well, there's 4 things I want to highlight, the first of which is scale. Institutional investors typically make larger investments, which means we have to be prepared to deploy larger amounts of capital. And that's where that origination engine becomes so important. As we take an additional investment dollars from these institutions, we feed them into that origination engine that scales accordingly and sources more assets.

Number two, and I'm going to go out of order here. Number two is structure. Structures or funds create access points. And it's important that we have different access points that meet the different needs of investors around the world. Now that could be debt versus equity, onshore versus offshore. The $1 billion of new capital inflows that we saw in our income funds, those were institutional investors who are comfortable with an equity style fund investment. The securitization on the flip side is a rated debt offering. And that speaks to an entirely different audience of investors like banks and insurance companies. But having those different access points is important to capitalize on the different types of interest we receive.

Three is awareness, pretty self-explanatory, but you have to be out there telling your story to stay top of mind. Distribution drives capital. So we partner with some allocators that get us in front of new audiences. We participate in events like the Milken Institute in order to increase our exposure. No matter how attractive the underlying asset may be, if investors are not aware of what you have to offer, it doesn't matter.

And number four is data. Data drives confidence as does experience on both sides of the aisle. As a manager, data gives us confidence in the decisions we make and the new products that we launch. And for investors, knowing that we are operating with the data and experience that we have, they have confidence in our ability to hit our targets. But what data do we have and what are we doing with it? So at the core of every decision made at our firm is this repository of data that we've been building for over 20 years. 20-plus years of data related to health impairments and mortality, but also 20-plus years of data related to life insurance contracts and how they price. We make data-driven decisions related to underwriting, new policy selection, portfolio construction and ongoing portfolio management. And recently, we started capturing that data at both the asset level and the deal level on blockchain as a means of creating immutable records. And those immutable records drive security and efficiency in the transaction.

For us, for now, blockchain isn't the strategy. It's not the asset, but it fortifies both of those things. And in addition to enhancing security and transparency and efficiency, blockchain can be used for scalability and liquidity. If you think about where we currently stand, we have a little over 100 assets on blockchain, but it's our goal by year-end to have our entire portfolio tokenized. And what that's going to do is put us in front of an entirely new audience of investors, investors who have an appetite for digital assets, investors who are looking for tokenized cash flows. So again, we're very excited about what lies ahead of us. We're very proud of how far we've come.

But in closing here, I want to kind of circle back to where we started with that origination engine. The origination engine that creates the supply, the assets that are fed into our asset management business where we develop the structures that can be distributed around the world to investors. As that new capital comes in, we feed it back into the origination engine and the system repeats and it scales. We've built a powerful engine. We've built a powerful system, and it's one that we've built to scale. And it's one that we've built on 20-plus years of data and experience.

And I'll leave you with a quote. I wasn't sure if it was going to include this or not, depending on timing, but I'm looking at Elena and she said, I have a minute. So I'll leave you with a quote, and the quote is from a French industrialist from the 1800s by the name of Jean-Baptiste Andre Godin. And the quote is, "The quality of our expectations determines the quality of our actions." At Abacus, we expect to be the gold standard for all things, longevity and lifespan investing. We expect to grow our AUM from $3.5 billion up to $10 billion and beyond. But it's the quality of the actions we're taking today and the processes we implement today that prepare and position us for the future we're expecting. Thank you very much. Hope you enjoyed the presentation.

All right. So for the next section, we will speak about our expanding asset management business. And I think we've gotten a lot of questions like why are you -- why do you have this other product? Well, fun fact, when you do well, your investors ask what else can they invest with you? And the broader asset-based finance universe actually encompasses longevity market assets. Longevity market assets are just a flavor of a variety of other things that can we be doing in asset-based finance. A lot of those things are database. They have a lot of very similar characteristics. And our investors demand that we offer more products to them. And earlier this year, we hired a very good friend of mine, Monty Cook, who is leading that effort, and he will take you through the presentation today.

Good morning. So you've heard today that the -- we're going to restart. So you've heard today about how the Abacus Asset Management business, Abacus Asset Group creates durable shareholder value through fee-related AUM. One of the ways that we grow that fee-related AUM, as you heard from Corey, as we increase our longevity fund products. The other way that we grow that fee-paying AUM is through adding additional strategies, new investment strategies. The more strategies we can grow, the more we have to offer investors, every new strategy we add is a new source of recurring fee-paying assets. And that diversification matters now more than ever, right? You heard about that $120 trillion generational wealth transfer. The more strategies we can offer, the better positioned we are to capture more of that $120 trillion.

So today, I want to introduce the newest engine of that growth, a new ABF strategy that we are building. I'll walk you through our platform, the market opportunity, what makes our approach different and what it all means for long-term value. But first, a quick grounding in what asset-based finance is. ABF is lending against assets, the things that power everyday Mainstreet commerce, mortgages on where people live, credit cards and auto loans behind how they buy, equipment and commercial loans behind how businesses operate.

Take equipment finance. A specialty lender originates thousands of leases secured by things like tow trucks, forklifts, manufacturing machinery, but it can't hold them all on its balance sheet. It needs capital to keep lending. ABF can provide that capital. By lending against those pools of leases, the contractual cash flows repay us. The equipment is a collateral behind it. And multiply that across mortgages, credit cards, auto loans, equipment and commercial finance, you see just how massive the market is and the built-in diversity. The key point, this isn't abstract or exotic. It's financing tied to the whole economy, which is exactly what makes the market so significant.

So why do we like asset-based finance? It's the natural evolution of our alternative assets expertise and the market is enormous and underpenetrated. Addressable market is something like $20 trillion for ABF, and it's only about 4% penetrated. Compare that to the corporate credit market, which is about half the size, $10 trillion or $11 trillion, yet it's 16% penetrated. That implies roughly a 4x plus room for growth. And it's diversified across numerous verticals, right? Commercial finance, hard assets, consumer finance, contractual cash flows. This is why we're building ABF for the market opportunity. The market is benefiting from a dramatic extraordinary structural shift. Over 2 decades, banks have retreated under regulatory pressure since the global financial crisis. And then in 2023, we had the regional banking crisis, and that really accelerated it.

The private ABF market has grown something like 67% since 2006. It's clearly at an inflection point and poised for institutional scale, fewer dedicated players in a large target-rich data-rich market, early movers with real expertise win. Also for the portfolio benefits, low correlation to corporate credit and structural advantages like liquidating cash flows and shorter durations and for the superior risk-adjusted returns, the historically lower losses versus a corporate credit and structural downside protection that's inherent in the strategy.

So here's what makes our approach different. We deliberately target the mid-market sweet spot, which is this, call it, under 200. We have 100 here, 100, 200 market, generally underserved. And it's as a result of the fact that the mega platforms have moved upmarket where they can deploy their capital more efficiently. Less competition means wider spreads on our credit investments, stronger covenants and structural protections, more lender-friendly documentation, all without taking on weaker credit. That's how you create alpha.

Our ABS strategy also benefits from more thorough underwriting of the originator and the assets and also the fact that I was realized -- someone's flipped my slides here. But we'll get to it. So by sourcing opportunities to these deep relationships, look to avoid competitive processes and benefit from both team-wide and Abacus-wide relationships as we source these specialty finance insurance transactions. As Elena noted, senior team here has more than a decade of experience working together, targeting transactions in the sweet spot and also originating numerous proprietary transactions. So the bigger story for investors is fee-related earnings. As the strategy scales AUM, it creates a durable stream of fee-related earnings, the high-quality, high multiple earnings that the market rewards.

And because it runs on our existing platform, that growth compounds the value of the asset management business. We are building and launching this now. It's one of the ways we create the long-term value and also position the platform to capture more of that $120 trillion wealth transfer. Beyond the direct revenue, there are significant secondary benefits. First, cross-sell. ABF is a logical addition to our asset-driven longevity strategy. Second, client stickiness. Investors in multiple funds simply don't leave. The lifetime value goes up. Third, platform leverage. We're adding strategies to the existing Abacus platform. By adding those strategies, we're reusing compliance, operations, finance, IR infrastructure. The marginal cost is a fraction of building stand-alone. Every strategy we add makes the entire platform more defensible, more valuable and more attractive. So the core message I want to leave you with on value creation, product depth is a competitive moat and ABF accelerates that moat building. Thank you.

So we have one more presentation before we move to outside speakers. And Martin is one of the newer additions to the team. Martin is based in Luxembourg. He is the COO of the asset group outside of the U.S. and he has a wealth of experience in working in various European jurisdictions kind of such as Luxembourg, Switzerland and Liechtenstein. He has worked at a variety of businesses, both large and small, and he has held role across finance, investing and operations, which is why we're very fortunate and lucky to have him join our team because, of course, we're all looking to expand our asset management capabilities globally even more so than we have today. Welcome, Martin.

Thank you, everyone. Good morning also from my side. I'm between you and a couple of very interesting interviews. So it will take about 7 minutes, and I do operations. We're on time. So my name is Martin Larsson, and I'm the Chief Operating Officer for Abacus in Europe. Elena spoke about the concept of rails and how long-term value of a platform increasingly resides in the infrastructure it owns rather than in the individual transaction. And I would like to spend a few minutes on discussing one of those rails, which is capital formation and distribution. EMEA, Asia.

One of the observations from the well-known 100-Bagger study was that exceptional long-term businesses tend to share several characteristics. They operate in large addressable markets. They continuously invest in infrastructure around their core businesses, and they build capabilities that support the long-term compounding.

In financial services, that infrastructure increasingly includes governance, product manufacturing and distribution. And that is where Europe and the rest of the world plays an important role for Abacus. So Europe represents one of the world's largest pools of institutional alternative investment capital. Today, approximately $8.1 trillion of alternative investment fund assets under management. So this is money that's already invested in products in Europe.

That's addressable assets for us. Importantly, this market is not defined only by the scale, but also by the sophistication of the investor base. So pension funds, insurance companies, private banks, wealth managers, institutional allocators, they continue to increase the exposure to alternative assets as they seek diversification, income generation and differentiated return streams.

And one of the observations from the 100-Bagger study was the exceptional businesses tend to operate in very large markets and continuously expand the infrastructure around the core capabilities. And we believe there is an important lesson here for alternative asset managers.

Competitive advantage is no longer created solely by originating differentiated assets. Increasingly, it is also created by building efficient access to institutional capital. So let's say, put differently, long-term platform value is created by controlling both access to differentiated assets and access to capital.

So as private markets have matured, institutional investors have become increasingly focused on governance, transparency, risk management and operational resilience. So again, the 100-Bagger study also observed that many exceptional businesses continuously invest in infrastructure around their core competencies. And we've seen a similar evolution in private markets.

Institutional capital increasingly requires institutional frameworks before capital can be deployed at least at scale. In Europe, the Alternative Investment Fund Manager directive and framework, which we call in everyday speak, the EU Passport, emerged as one of the infrastructure supporting this institutionalization process.

And more recently, AIFMD, Alternative Investment Fund Manager Directive II has continued to reinforce these themes through enhanced governance, delegation of oversight, liquidity management and regulatory transparency. The broader point is not regulation. The broader point is that institutional capital requires institutional infrastructure.

So Elena described how Abacus is building the rails that support lifespan-linked finance. Those rails include origination, data servicing, asset management and distribution and Europe plays an important role within that broader capital formation and distribution infrastructure.

The European AIFMD framework and the European Passport supports capital formation through governance and product infrastructure and distribution. Investor protection creates confidence. Governance creates accountability and product infrastructure creates investable structures. That distribution provides efficient access to institutional and professional capital.

So taken together, these capabilities create the infrastructure required to connect investment opportunities with institutional capital. And this is important because as asset classes mature, competitive advantages increasingly comes not only from owning the differentiated assets, but also from owning the infrastructure that enables efficient capital formation.

And that means that we are slowly coming to the end, but I'll leave you with a few takeaways, and that's, in particular, 3 observations. Institutional capital requires institutional frameworks. Governance, transparency, operational resilience remains the prerequisites for institutional allocations.

Second, distribution is a core platform rail. Elena described how origination data, servicing support and creation and management of investment opportunities, but distribution performs a complementary role by connecting those opportunities with institutional capital.

And long-term platform value increasingly comes from controlling both access to assets and the capital. And third and my last point today, one of the recurring observations from the 100-Bagger study was the exceptional businesses continuously invest in and expand infrastructure around their core competencies.

In financial services, that infrastructure increasingly includes governance, product infrastructure and distribution. And in that sense, Europe is not simply a geography. It is part of the infrastructure that helps connect institutional capital with investment opportunities and support the long-term scalability of our broader platform.

Thank you very much for your time. Thank you for coming. And it's over to you, Jay.

Awesome. Thank you. All right. Well, this has been, I think, an amazing day thus far of sharing with you, and hopefully, you feel the same way about Abacus' team as I do. It's compelling. They're confident. They all have a great deal of experience in everything that we do, but it's an example of our culture.

Also, everyone you heard from today is a shareholder of Abacus. They have ownership in this business. And I think that that's one of the things that I'm most proud of is that when we think about how businesses are running and successful over a long period of time, Matt said it really well. Everyone you heard from today is a founder.

They have been with this business for many times in Samantha Butcher's case, 22 years. Now maybe not in the definitive sense that some of us think about what a founder looks like. But to me, that's what the founders are. They're everybody that you've already heard from the breadth of our team, and they all have the same alignment that each and every one of you do as a shareholder.

I kicked off my commentary today around this concept of time and Abacus being the market maker of the most scarce, most valuable resource there is. My hope today is that if you've heard these conversations, you've heard from Armando, how valuable that is, but how we can actually definitively start to set a price on that. We heard that things were pretty accurate from Dr. Jay Olshansky.

And so now when you take accuracy, foundation, platform and you start to now think about how that can build into the other verticals, now you can see why I'm up here, and I am so excited about what's coming next. And when we think about what's next, the stock price is going to continue to grow because we're going to continue to put forth the things that really matter.

Continue to compound our earnings, but even more so than that, expand our multiple with businesses that are complementary to what we already do. That's really the secret. You kind of heard that from James Morrow. Multiple expansion is where you see significant growth in businesses. And that's what we're really starting to, in fact, step into.

So I want to, first and foremost, say thank you to all of our -- each and every person who had dialed in on our live feed or dialed. This isn't 1986. It's like AOL, who signed in through their Internet platform of some form into our live feed. We want to thank you for participating in the Investor Day.

For those of you that are here live, stay seating because as a special treat for everyone who comes live to our Investor Day, we always hold 2 interviews that are only for -- or a few interviews that are only for the people here that are live. And so I want to leave you with this quote from the live feed. We talked about how Benjamin Franklin had the quote that time is money.

There's another quote that I like, and it's from the founder of Rolex. And what he said was, was that a Rolex doesn't just tell time, it tells history. Because Rolex has solved this idea around the value of time just differently, it was in a watch.

Abacus Global Management tells the future. When you think about the value of that time for each and every one of you on that arc, think about the scalability and think about the impact and the difference that Abacus is going to have on every single investor, adviser, consultant and firm, how we're already applying it and how we're going to apply it next.

So thank you to our live feed audience. Everyone else, please stay seated. We're going to see again, if you have any questions from the live feed, you can always submit those to our IR team.

Good day, ladies and gentlemen. Welcome to the Abacus Global Management First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the call over to Robert Phillips, Abacus Global Management's Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead, sir.

Thank you, operator, and thank you, everyone, for joining Abacus Global Management's first 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.

This afternoon at 4:15 p.m. Eastern Time, Abacus Global Management released our first quarter 2026 results. This afternoon's call will allow participants to ask questions about our results.

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

Abacus Global Management specifically refers participants to the presentation furnished today on Form 8-K with the Securities and Exchange Commission and to remind listeners that some of the comments today may contain forward-looking statements and as such, will be subject to risks and uncertainties, which, if they materialize, could materially affect results. For more information on the risks, 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. 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. 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.

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

Thank you, Rob, and good afternoon, everyone. Having had the pleasure of speaking with many of you in the weeks following our fourth quarter earnings call, I will keep my remarks focused and direct. I want to lead with the headline. Based on what we are seeing in the business today, we are raising our full year 2026 adjusted net income guidance from a range of $96 million to $104 million to a new range of $100 million to $106 million, lifting both the low end and the high end of our range. The new range translates into $1 to $1.05 in adjusted EPS. The conviction behind that decision comes from a few drivers we are seeing in real time.

We raised $288 million into our longevity funds this quarter on top of the $275 million in Q4. By way of context, we raised $630 million across all of 2025. The step change in fundraising we saw at year-end has carried cleanly into the new year, and our pipeline continues to grow. In Q1 alone, we reviewed nearly 9,000 qualified policies compared to roughly 11,000 across all of 2025. The flywheel is working exactly as designed. Increased assets under management drives origination and our infrastructure is meeting that demand. That near-term visibility is what gives us the confidence to provide a forward quarter guide alongside our full year range. For Q2 2026, we expect adjusted net income of $24 million to $26 million or $0.24 to $0.26 in adjusted EPS.

I want to spend a moment in the shape of the year because the pace of our growth over the past several years has obscured a normal dynamic in how we operate. Revenue does not flow evenly across quarters. January is typically our lightest month with activity picking up through February and March, then running robustly through spring and summer. August is generally a slower month for both deployment and fundraising before momentum picks back up in the fall and builds through a strong fourth quarter finish.

Q1 ANI came in at $20 million. Q2 is guided to $24 million to $26 million. The back half is historically our strongest, and that is the path to our raised full year range. Bill will walk you through business operations and financial results, and you will see that strength reflected across the metrics that matter. Elena will cover our KPIs and capital allocation. But first, let me set up the 2 dynamics that I believe define this moment for Abacus.

The first is the current macro environment and what it means for our asset class. The uncertainty that has characterized Q1 has created a defining moment across the alternatives landscape. Investors are reassessing where they allocate capital. They are moving toward assets that are genuinely uncorrelated from market sentiment and credit cycles. That is precisely what Abacus offers. Our yield is mortality-driven, not rates driven. That means our returns are structurally uncorrelated. And this quarter, that distinction drove capital to us in a meaningful way. Assets under management grew substantially in Q1, fueled by capital inflows from investors who understand that we are not private credit, we are the alternative to it.

Now, I want to address something that is important for investors to understand clearly, the relationship between increased demand and purchase discount rates. As more institutional capital has flowed into the asset class, buyers are competing more aggressively for policies. That competition means buyers are paying more for each policy, which translates directly into lower purchase discount rates. I want to be emphatic about this. A lower purchase discount rate in our business is a positive outcome. It reflects rising asset values and expanded long-term spreads on the contracts we already hold, and we believe this dynamic will continue through 2026.

The second thing I want to highlight is what I consider one of the most important proof points this company has ever delivered, and it happened this quarter. Our LMA Income II Fund reached the end of its initial term. This is a fund we launched 3 years ago that grew to approximately $115 million in assets under management. At conclusion of its term, we returned capital to every single investor who requested it, 100% on time as promised. Returning investor capital at the end of a fund's term should be the norm. Across the alternatives industry today, it is not. At a moment when restrictions on investor capital have been commonplace, when redemption gates have become accepted norms, Abacus did what we said we would do.

And here is what makes it even more meaningful. Approximately 1/3 of those investors chose to extend their investment and another 1/3 reinvested their capital into our new products. This is not just capital retention. That is an affirmation. Investors who had full optionality evaluated this asset, evaluated these funds and chose to put more capital to work with us. That is the strongest endorsement we can receive. Bill will address the balance sheet impact in detail, but I will note that this event reduces debt on our balance sheet by more than $75 million, further strengthening our capital position as we move through the remainder of the year.

Looking ahead, I want to highlight 2 transformational growth opportunities that I believe will define the next chapter for Abacus. The first is our investment in Manning & Napier. This relationship continues to progress with real momentum. The strategic alliance and distribution agreements are both taking shape, and we are already working to integrate our respective platforms. Manning's existing infrastructure is robust and well suited to support what we are building together. This is not a passive investment. It is a distribution partnership that we expect to materially expand the reach of our products to a broader base of advisers and their clients. We expect early results from that alliance in Q2, and we'll have more to say as that relationship matures.

The second is our securitization program. Following the success of our first securitization, we are actively targeting a second significant securitization in late Q2 or early Q3. Securitization is a powerful tool for us. It allows us to recycle capital efficiently, diversify our funding sources and demonstrate to institutional markets the quality and consistency of the assets we originate. A second transaction in this time frame would represent a meaningful acceleration of that program and further validate the institutional credibility of this asset class. We will provide updates as that process advances.

With that, I will turn it over to Bill.

Thanks, Jay. I want to cover 2 things. First, how the business operated during the quarter; and second, what our financial results reflect about the momentum Jay described. Then I'll turn it over to Elena for KPIs and capital allocation.

Jay covered the headline drivers for the quarter. I want to get into the operational detail underneath them. The deployment volume Jay referenced ran through an origination process that remained highly selective. We reviewed a substantial number of qualified policies in Q1 and closed at a rate consistent with our historical standards. We did not relax underwriting to meet demand. The higher inbound flow simply gave us more to choose from. Elena will take you through the specific metrics, but the headline is that volume went up and quality held.

The most direct evidence of how the operational pieces came together this quarter is the cash flow statement. We generated $91.7 million in operating cash flow in Q1 2026 compared to negative $61.6 million in Q1 2025, a swing of more than $153 million year-over-year. That reflects 3 things converging at once: policies on our balance sheet, generating cash through trading and maturities, the LMA Income II Fund completing its initial term and releasing capital and the underlying operating leverage of the platform as we scale revenue without a commensurate increase in cash costs.

Cash conversion is the ultimate test of whether the model is working and Q1 passed that test decisively. On the portfolio, the short version is that quality and margin are both tracking ahead of target. Realized gains for the quarter exceeded our 20% long-term benchmark, and our seasoned assets continue to appreciate in line with actuarial expectations. Elena will walk through the detailed KPIs of turnover, weighted average life expectancy and insured age, but the directional read is clean across the board.

On LMA Income II, Jay described the fund outcome and what it means for investor confidence. I want to add the financial reporting dimension. Because of the fund's initial structure, we were required under GAAP to consolidate it as debt on our balance sheet. With the conclusion of the fund's initial term this quarter, that obligation unwinds. The result is a reduction in reported balance sheet debt of more than $75 million. I want to be precise about this. It is not a corporate deleveraging event. It is the reduction of a fund level consolidation from our balance sheet. The practical effect is that our reported leverage ratios improved significantly without any change in our underlying capital structure. I will address the specific metrics next in the financial section.

Turning to our financial results. Total revenue in the first quarter grew 34.6% to $59.4 million compared to $44.1 million in the prior year period. Growth was primarily driven by strong performance in Life Solutions, which generated $50.6 million, along with continued expansion in asset management fees, which reached $8.5 million, reflecting the growth in fee-paying AUM across our longevity fund strategies. Technology Services contributed $0.4 million, consistent with our continued early-stage build-out of that segment.

Turning to expenses. Total operating expenses for the first quarter were approximately $34.8 million compared to $19.6 million in the prior year when excluding the impact of gain on change in fair value of debt and gain on equity securities. The year-over-year increase was primarily driven by higher sales and marketing spend in support of our distribution build-out, along with increased G&A expenses associated with our platform investments, business acquisition and special project expenses. These are deliberate investments in the growth profile of the business.

On an adjusted basis, excluding noncash stock compensation, business acquisition and special project costs, amortization and changes in the fair value of investments, adjusted net income for the first quarter grew by 16.6% to $20.1 million compared to $17.3 million in the prior year. Adjusted EBITDA for the quarter grew 33.3% to $32.7 million compared to $24.5 million in the prior year. Adjusted EBITDA margin was 55% for the quarter compared to 56% in the prior year. We are committed to growing the business responsibly, which is demonstrated by our ability to grow revenue and EBITDA by over 30% while sustaining margins in that range. GAAP net income attributable to Abacus Global Management for the quarter was $7.3 million or $0.07 per diluted share compared to $4.6 million or $0.05 per diluted share in the prior year period, representing growth of 59%.

Turning to our balance sheet. For Q1, adjusted return on equity was 19% and adjusted return on invested capital was 17%, both improvements from Q1 2025. As of March 31, 2026, the company had cash of $37.2 million, balance sheet policy assets of $392.8 million, and outstanding long-term debt of approximately $330 million. The reduction in reported debt from $405.8 million at year-end reflects the conclusion of the initial term for the LMA Income II Fund I described earlier, which removed approximately $76.7 million in fund level reporting obligations from our balance sheet.

In summary, we are very pleased with our strong start to 2026. We delivered meaningful top line growth, sustained profitability and strengthened our balance sheet, all while continuing to invest in the platform initiatives that will drive the next chapter of this company's growth.

With that, I'll turn it over to Elena.

Thanks, Bill. I want to use my time today to walk through 2 things: how our balance sheet performed during the quarter and how we think about capital allocation at Abacus.

Turning to the performance of our balance sheet. For Q1, our annualized portfolio turnover was 1.9x, in line with our long-term target of 1.5x to 2x. Our average realized gain was 26% for the quarter. These margins reflect rigorous origination, precise actuarial targets and patience, exceeding our target of 20%. Portfolio quality continues to be strong.

Assets seasoned beyond 365 days had a weighted average life expectancy of 46 months and a weighted average insured age of 88 years compared to 45 months and 88 years last quarter. These positions reflect conviction in our underwriting, and we expect them to generate attractive returns as they continue to season.

During Q1, we deployed $163.6 million in capital off our balance sheet. Our origination platform reviewed more than 9,000 qualified policies during the quarter, and we remain highly selective. This metric underpins the depth of our pipeline as last year, we have reviewed a little under 11,000 policies total.

I want to spend the balance of my time on how we think about capital allocation because I believe it's one of the most important things for our shareholders to understand about this business. We think about capital allocation in 2 categories: operating and investing. Operating capital supports the day-to-day engine of the business. That means purchasing policies, acquiring other operating assets and funding organic growth across our platform. Investing capital is effectively everything else, returning capital to shareholders through dividends and buybacks, pursuing strategic M&A and supporting the growth of our asset management business, whether that means seeding new fund strategies, supporting our securitization program or providing the infrastructure for AUM expansion. These are not competing priorities. They are sequenced deliberately, and our goal is to ensure we always have the flexibility to do both well.

When we look at where our capital comes from, the starting point is our balance sheet. We view our active balance sheet, our managed assets, as approximately $450 million in cash and liquid assets that we convert into cash in short order through our normal origination to monetization cycle. That is the core funding mechanism of the business, and it is self-sustaining. We do not need incremental balance sheet capital to grow our core Life Solutions business.

Beyond that, we have 2 external levers, debt and equity. On debt, we're currently meaningfully under-levered. Our recourse debt-to-EBITDA ratio stands at around 2x compared to capacity, we believe extends to 4x. That gives us significant incremental borrowing ability to deploy into high-returning opportunities without diluting shareholders. On equities, we're not looking to raise primary capital outside of any potential M&A activity. Our business generates the cash flow to fund its own growth, and we intend to keep it that way.

When I step back and look at the business today, the story is straightforward. We have a core origination engine in Life Solutions that continues to perform at a high level, supported by disciplined underwriting and consistent monetization. On top of that, we're building a scalable asset management platform designed to generate growing fee-related earnings for our longevity funds, our ETFs, our asset-based finance strategy and continued expansion of our distribution capability. Since inception, the new vintage of longevity funds has attracted nearly $1 billion in investor capital.

Growing fee-related earnings remains a central priority. As we scale fee-paying assets across our strategies, we generate contractual high-margin management fee income without requiring additional balance sheet capital. And our capital allocation framework is designed to ensure that every dollar we deploy, whether into operations or investments is building toward that outcome. We're executing on this deliberately step-by-step with a long-term perspective. And we believe that approach will continue to create value for our shareholders.

With that, I'll turn it over to Jay for closing remarks.

As I reflect on this quarter, what stands out is not any single result, but the convergence of everything we have been building toward. Capital is flowing into this asset class because investors are seeking exactly what we provide: consistent, predictable, uncorrelated returns. Our operational infrastructure is meeting that demand. Our funds are performing, and our strategic initiatives are positioning us to capture a much larger share of the opportunity in front of us. The foundation is strong and the trajectory is clear. These initiatives represent the kind of strategic scaling that moves the company from small cap to mid-cap. We are executing with both urgency and conviction.

I want to thank our investors for their continued confidence, our team for their exceptional execution this quarter and our partners for their commitment to what we are building. We look forward to updating you on our progress and delivering on the opportunity this moment represents.

We will now turn it over to the operator for any questions.

[Operator Instructions] Our first question will come from Patrick Davitt with Autonomous Research.

First on flows. Since you say in the release that the second securitization could slip into 3Q, if that did fall in 2Q, would that be incremental to the $500 million first half inflow expectation?

Patrick, yes, that would be in addition to that $500 million.

Okay. Great. And could you update us on where we are in the SEC process for the interval fund?

Sure. Thanks for asking. We've been working diligently with the SEC. And while we can't specifically state where and how their specific process timing is, we feel good about potentially being able to make an announcement in Q2.

Our next question will come from Andrew Kligerman with TD Cowen.

Looking at your Slide 11, I thought that was pretty interesting. So it implies that wealth advisers would move from 0 to about 25% of revenue over the next few years. Could you walk us through kind of like a little road map as to how you get to 25% of revenue? Is it Manning & Napier? Is it existing advisers? Do you expect a fair amount of deals? Just curious as to the road map there on that.

Thanks for asking that, Andrew, and great to hear from you. Yes, our road map to the financial advisory/really private wealth division is really consistent with the premise that it's the build it or buy it. And we have a number of opportunities that we think will come to fruition and help us meet those targets. The Manning & Napier initial investment here, I think, made a ton of sense for us to demonstrate and show the synergies that we've talked about between sourcing contracts, sending them and processing potentially lead gen for them, and then kind of operating those synergies with additional cash flow from both entities.

And we're already seeing some success there and very close to kind of finalizing our strategic alliance agreement and the go-forward agreement. And we have a number of additional opportunities in place of registered investment advisers that I think are seeking that same type of partnership, whether that's in a minority position or a full position, full acquisition. And so we're really excited about the pipeline for that. I think we'll see more of that through year-end and certainly more heavily into '27.

Got it. Makes a lot of sense. And then just looking at Slide 27, I thought it was a nice trend to see the days held on the sold policies increased really significantly to 290, which maybe you could share with us the kinds of gains that you have by holding that for quite a bit of time. And then on the flip side, the days held on the owned policies kind of decreased meaningfully to 209. So what are you thinking about both of those metrics as we move forward? Are they right in the band where they should be? Or do you see one of them moving up or down? What are your thoughts going forward?

Thank you. And I think you nailed it on the last part of the question was that we believe we're in kind of the band where we target. If you look at kind of historically where that's been at, whether it's days held and/or days held via transactions, we're finding a little bit of a sweet spot there. And there was -- in the prior quarter, we saw a little bit of shift where we had taken advantage of some contracts that were very opportunistic and moved a larger percentage of those. But I think historically, where we're trading at right now is kind of where you should see those numbers start to kind of think about modeling going forward, right?

I think in the quarter, we were somewhere around 1.9x to 2x on an annual basis related to our book turnover. And I think that's reflective of the opportunities we see in the market. One of the things I'll highlight, though, is that we are seeing significant increased demand for the underlying asset, driven by certainly uncorrelated nature. But if you consider some of the volatility that we've seen in other kind of adjacent asset classes, if you will, this opportunity, I think, in this asset class has certainly been more appealing to institutional investors who are looking for maybe a little bit less yield, but they want that uncorrelated stability nature that these policies represent.

Our next question will come from Mike Grondahl with Northland Securities.

I just wanted to ask about the 9,000 policies you reviewed in 1Q '26 versus the 11,000 in 2025. Would you say that's all organic growth, all inbound? Any extra marketing or anything to drive that?

Sure. Thanks, Mike. It's a very astute pickup. Yes, it is organic. It's also, I would argue, a bit opportunistic from our perspective. And then we're seeing opportunities out there as we continue to have demand and increased capital related to our own funds and certainly other funds, that's driving up supply. And I think what I'm really trying to highlight there is that as we continue to raise capital on our funds, securitizations and some of these other products, sometimes that leads to the question of do we have the policies to support that demand. And I think clear evidence shows in Q1, we do. And some of that's carrying over into Q2, and we're excited about that. So that is organic. We're not necessarily turning up the advertising budget. I think the budget year-over-year was fairly stable in Q1. But instead, I also believe that the work of '25, where we did increase our budget, right, particularly Q3, Q4, you start to see that paying off in Q1 and Q2 and Q3.

Got it. And then you talked about rising asset value and the demand for those policies resulting in that lower purchase discount rate. Can you quantify that for us a little bit, Jay? Like, is that worth a point or 2? Or how do we measure that or get a sense?

Sure. I think the best way to think about it, right, is when you look at the slide related to our gross trade spread margin, right? When you see that number, I think we're plus or minus around 26% for the quarter. That's the best way to quantify it. So even though you might see demand increase, which in most markets, when you have demand increase driving prices up, you would historically see those discount rates or the forecasted purchase rates compressing. In our case, what we're stating is that can actually be a good event for us, right? Because prices go up, we sell at a higher price and that demand then drives additional revenue. And my point is I believe we're going to see more of that, right?

When you just look at the cash flows into our owned funds, but then demand from investors who are seeking capital sources that, again, are less volatile and correlated, those kinds of attributes, it becomes a positive outcome for us. So to be specific, if you were to kind of quantify this to kind of a percentage point, I think that's a bit of a challenge because we'll see that happen in any given quarter. But my point is that whether it's 100 basis points or 200 basis points, it's ultimately a positive outcome for us.

Our next question will come from Crispin Love with Piper Sandler.

This is Ben Graham in for Crispin Love. I'm just wondering if you could share a little bit more about your current thoughts on M&A, just specifically what types of assets you're most interested in currently? And basically, would it be more on the RIA side, technology or some other areas?

Yes, sure. Great question. The pipeline is fairly robust right now. And the areas that we're most interested in, you nailed it on the RIA side. We think that there are some very interesting opportunities there. And for us, we're also super selective. We want to make sure that this is the type of platform that meets our expectations culturally, that is profitable. And most importantly, and I think this is the biggest takeaway for any of our M&A, it's got to be accretive. right? It's super important that these opportunities are accretive to us both from an EPS basis, but in addition to that, accretive in relationship to our synergies. We want to show that this is the type of acquisition that's going to help grow the business into '27, '28 because I think that's what our shareholders want us to do. So we're very disciplined in that. We want accretive businesses.

When we look at our technology platforms, we're still developing, I think, some very exciting things in-house that in the next probably 60 days, we're going to start announcing certainly at our Investor Day, we're going to roll some of those out that are going to fundamentally have a significant transformative shift in private wealth management. And those types of programs where we're incorporating lifespan into financial planning is starting to happen in real time and adopting different AI platforms to assist with that to accelerate that process is all happening in real time.

So if we're looking at technology-type platforms, it's the type of platforms that can provide data and information to our clients that is incredibly useful for a customized solution of whether it's insurance or financial planning, but all related to their longevity data. I just spoke to the Milken Institute on this. And this was a huge, huge talking point because there's $1 trillion of wealth transferring. Our point is, wouldn't the world like to know when that's going to transfer. And you can know that better if you better understand the longevity and lifespan data behind it. So those companies are super interesting to us.

Awesome. And then just briefly on the carrier buyback program. I'm just wondering if there's anything new to call out here, new announcements, expectations for the year? And just if anything's baked into the guide there?

There still continues to be a very high level of interest and structure that we're working directly with carriers on. I think in addition to the buyback, we're also working and speaking with carriers about new product issuance related to our underwriting. So it's amazing how this is really coming full circle in our partnerships and strategic partnerships with carriers as well as reinsurance companies.

And when I talk about structure in relationship to a buyback, there's some structural advantages that we're working through with some of our carrier partners that can actually make that buyback more affordable as well as easier to execute on. So we're continuing that program through 2026. And we're also, in addition to that, adding to some of our carrier relationships, even potentially new product sales.

Our next question will come from Timothy D'Agostino with B. Riley Securities.

I joined a bit late here, so apologies if anything is repeated. Looking at capital deployed for policy originations on Slide 26, that number for 1Q continues or was ahead again of what we were forecasting. I guess trying to understand in 2025 in the beginning part, it was about $120 million. At these current levels of $230 million in the fourth quarter and $163 million in the first quarter, are you comfortable with this kind of being the run rate? Or are you taking advantage of opportunities?

Great question. And yes, certainly opportunistic. But I would also add that we had capital demand to meet that capital deployment. Now, if we're modeling to what we think a closer range will be, we have a couple of analysts who have tracked us at a really high number, which isn't necessarily the right way to think about it either. I think where we're tracking is in that [ $130 million to $150 million ] range and certainly had a really nice quarter in Q1.

The one kind of KPI we take into consideration is that you could see that number increase over $150 million like we did in Q1, if you see our capital -- gross capital inflows higher, right? So the way that I would think about it is that, that number can be correlated to the amount of demand and capital that we have to put to work. And so I'm hesitant to come out and say, "Oh, model this at [ $200 million" ] because in any given quarter, as I have highlighted, that could change a little bit.

And so we're much more comfortable in this kind of guiding to that $130 million to $150 million number. And then if we surpass that by a little bit like we did in Q1, that's great. That's always our target is to exceed expectations. It's also why we raised our guidance. right? We kind of tried to put an indicator out there that says, look, we feel pretty good about what's going to happen in the remainder of '26, including capital deployed. We're comfortable in maybe the higher range of the $130 million to $150 million, and therefore, we'll increase our guidance to reflect that.

Okay. Great. And then if I can ask a second question on AUM, relatively flat quarter-over-quarter. I understand it's a short period just the first quarter. But as we look at the 2028 guide of $30 billion of AUM, I guess, could you walk us through again how much of that is coming from like organically and how much is inorganic?

Yes. The purpose there is to get pretty close to like a 50-50 number as we get out to 2028 on organic versus inorganic. And the inorganic would be acquisition and whether that's through some very exciting opportunities on the asset management side in addition to the private wealth side, as I've spoken about before. So that's the way that we're mapping that. We see more of that taking place as we come into '27. But based upon some of the opportunities we have in our pipeline, I will tell you that we believe we're tracking at that number.

Our next question will come from Patrick Davitt with Autonomous Research.

I don't think I saw it in the materials, but how much is left on the repurchase authorization? And through the lens of this M&A conversation, could you update us on how you're thinking about the stock here and repurchases from here?

Sure. Thank you, Patrick. We've deployed plus or minus around 50% of the last $20 million Board-approved buyback. So we still have, I think, some -- a decent amount of powder left to execute on. And we look closely at that. I mean, what you touched on is really important because we look at where we sit on a multiple basis based upon where our earnings are, our kind of consistent performance here, certainly in relationship to our recent -- we just announced we're raising again our EPS targets for '26 and then forecasted into the '27, '28.

So when we look at would we consider more stock repurchase, the answer is yes. I think that we still very much see the pricing of our stock is a very discounted price. And when we measure that against what -- where we may deploy other assets, right, we're looking at ROICs and ROEs in the high teens, low 20s. And we think that even based upon price targets from our analysts that, that is -- we're currently trading at a pretty significant discount to that.

So buybacks are still very much what we believe is an important piece to -- of our kind of things that we might deploy. When that is related to M&A, you're right, right? The stock price is important to that. And I think that in most M&A transactions, a percentage of that is related to the stock. And I think what's interesting to me is that the deals that we're looking at now in our pipeline are accretive even at this pricing. And so imagine if we pick up another 10%, 15%, 20%, 30% in stock valuation, these deals even become more accretive. And so when we're looking at a deal now, we're assuming in that M&A that, hey, this is at a very favorable stock price. Is this deal still accretive? As the stock price continues to carry some upward momentum, these deals will look even better. So we're -- we think we're in a great spot on the M&A side.

This concludes our question-and-answer session. I would now like to turn the meeting back over to Jay Jackson for any additional or closing remarks.

Thank you. Again, we just want to express our gratitude to our partners, our analysts, our shareholders and certainly, each and every one of our employees where nearly all of them are shareholders. I think it speaks volumes into the production of our company and our ability to continue to meet these consistent goals that we have set out. We raised our targets in 2026. Our expectations are we're going to continue to push through those through '27 and through '28, and we're tracking to our $250 million EBITDA of '28. And so we are grateful and thankful for all of you to be on our journey together and look forward to our next call.

Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Abacus Global Management's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the call over to Robert Phillips, Abacus Global Management's Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you, operator, and thank you, everyone, for joining Abacus Global Management's Fourth Quarter and Full Year 2025 Earnings Call. Here with me today are Jay Jackson, Chairman and Chief Executive Officer; Elena Plesco, Chief Capital Officer; and Bill McCauley, Chief Financial Officer. This afternoon at 4:15 p.m. Eastern Time Abacus Global Management released its fourth quarter and full year 2025 results. This afternoon's call will allow participants to ask questions about our results.

Before we begin, Abacus Global Management refers participants on this call to the Investor web page, ir.apicusgm.com for the press release, investor information and filings with the SEC for a discussion of the risks that can affect the business. Abacus Global management specifically reversed participants to the presentation furnished today on Form 8-K with the Securities and Exchange Commission, and to remind listeners that some of the comments today may contain forward-looking statements, and as such, will be subject to risks and uncertainties, which, if they materialize, could materially affect results.

For more information on the risks, 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. 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. 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.

With that, I'd now like to turn the call over to Jay Jackson, Chief Executive Officer.

Thank you, Rob, and good afternoon, everyone. Abacus closed the year by delivering another exceptional quarter, our 11th consecutive quarter of beating consensus. Today, I want to walk you through how we are executing against our vision and what the path forward looks like grounded, not in projections, but in what I'd call our proof point. A track record of consistent, measurable outperformance. 11 quarters ago, we made specific commitments to our shareholders about how we would scale the business.

Every quarter since we have delivered. Let me put that in concrete terms. We have exceeded guidance and beaten consensus every single quarter. Over that span, we have tripled adjusted net income and adjusted EBITDA. Expanded margins from 48% to 60% and growing our asset base more than 35 fold from under $100 million to nearly $3.6 billion.

We have executed disciplined capital allocation with ROE and ROIC consistently at 20% or higher. These are not aspirational figures, they are results, consistently delivered independently verified and compounding quarter after quarter. That track record is precisely why you should have confidence in what comes next.

Today, we are initiating our full year 2026 outlook for adjusted net income of $96 million to $104 million. This range implies another year of exceptional double-digit growth, up to 22% compared to full year 2025 adjusted net income of $85.7 million. This guidance is built on the same execution discipline that has defined every quarter of our public history.

Before I walk through our next set of goals, I want to ground this discussion in what makes the Abacus business model fundamentally differentiated. First, our assets are mortality-driven and completely uncorrelated to macro markets. They exhibit what we call positive data, positive accretion over time. As the insured ages and mortality probability increases, asset value naturally appreciates. There is no interest rate sensitivity, no credit cycle dependency and no reliance on market sentiment.

Second, Abacus is a data-driven business that is insulated from AI disruption. And in fact, positioned to benefit from it. We own proprietary mortality data that AI platforms need to source. As AI adoption accelerates, we become a more valuable data provider, not a displaced one.

Third, our assets are backed by regulated A-rated insurance carriers, providing certainty of payment upon maturity. These are contractual obligations from some of the most creditworthy institutions in the financial system.

Fourth, they are self-liquidating. Unlike real estate and private equity, we do not need to find a buyer or manufacture and exit the asset matures by design.

Fifth, typical unlevered uncorrelated returns range from 8% to 12% with limited downside risk, a profile that is exceptionally rare in today's environment. This is why institutional capital continues to flow into the space. The return profile is predictable, durable and genuinely diversifying.

During periods of market uncertainty, our origination business actually accelerates because we provide liquidity to policyholders when they need it most. In 2025 alone, Abacus paid nearly $0.25 billion to policyholders. Here's the broader reality. There is approximately $5 trillion in permanent life insurance outstanding in the United States today.

Roughly 75% of policies held by individuals over 65 lapse without ever paying a claim. Most policyholders do not realize that life insurance is personal property with meaningful market value, often worth significantly more than surrender value. Millions of Americans unknowingly walk away from 6- and 7-figure assets simply because they don't know an active secondary market exists. That is a massive structurally underserved addressable market, and that is exactly what Abacus was built to capture.

So where are we going? Today, I'm laying out the path from where we are now. A company that has tripled its revenue over the last 2 years to become a mid-cap company, specifically a business operating at approximately $450 million in EBITDA with 70% recurring revenue over the next 5 years. For those newer to the Abacus story, our strategy is built on 4 integrated verticals. Each one feeding and strengthening the others, creating a flywheel where we control the entire asset value chain.

Vertical One, Abacus Life Solutions, the foundation. Abacus Life Solutions is our origination engine and foundation of the entire platform. In a highly regulated industry, we have established ourselves as a clear market leader. In Q4 alone, we deployed a record $230 million of capital, bringing our full year 2025 deployment to over $580 million. Working with 78-plus institutional partners and over 30,000 financial advisers, we expect this momentum to continue accelerating in 2026. This segment delivers consistent realized earnings while feeding the asset pipeline across all 4 verticals.

Critically, it also generates approximately 10,000 excess leads per month. Individuals seeking insurance-related advice who don't qualify for our core business, but represent significant wealth management opportunities. That organic lead flow is the engine powering our private wealth vertical without the expensive customer acquisition costs typical of the industry.

Vertical 2, Abacus Asset Group to growth engine. Our asset group is the primary growth engine. We now manage over $3 billion in fee paying AUM across our longevity funds and ETFs. In 2025, we generated nearly $34 million in management fees. And our longevity funds alone have attracted $630 million in capital inflows. Our new longevity interval fund, which we expect to launch this year along with our asset-based finance strategy are creating clear executable pathways to reach $5 billion in fee-paying AUM by year-end 2026. This is not a stretch target. It is a natural extension of the institutional demand we are already seeing.

Vertical 3, data and technology, our competitive moat. Our data and technology division now operating as Abacus Intel continues to grow at strong multiples, adding another durable leg to our recurring revenue strategy. Our flagship product, MVerify has achieved 4x growth and now tracks nearly 3 million lives and over 300% year-over-year increase across 100-plus institutional systems delivering 97% coverage with less than 1% air rate.

To put this in perspective, government mortality systems such as social security can lag by up to 9 months and carry lower accuracy. Our system identifies mortality events in approximately 48 hours with near complete accuracy. That data advantage is a genuine competitive moat. It enhances our underwriting, asset management and wealth management capabilities simultaneously.

Let me be clear how we leverage AI. We are not using AI to manage portfolios. We are using AI and large language models to aggregate, structure and interpret health and medical data from policyholders and direct consumers. The result, broader data sets delivered in usable summary formats that accelerate underwriting, enhanced fraud prevention and optimize pension liability analysis faster than traditional methods.

We are targeting over $3 million in technology revenue for 2026 with significant M&A upside as we expand into insurance, pension and mortgage verticals. Today, we are already monetizing this data externally, packaging mortality analytics for state pension funds and generating recurring SaaS-like revenue streams.

Vertical 4, Abacus Wealth Advisors is our client-facing distribution channel, and we expect dramatic acceleration in 2026. Our team build-out and acquisition strategy are ahead of schedule. Over time, we expect private wealth to represent approximately 30% of our recurring revenue mix, supported by organic lead flow from our core business, not expensive external acquisition. And we're already putting that strategy into action.

In a recent development, Abacus global management has agreed to deploy approximately $50 million to acquire a minority position in manning and napier, a proven wealth advisory platform with over $18 billion in AUM, more than 50 years of trusted investment management and historical EBITDA in excess of $25 million. This investment creates compelling mutually reinforcing synergies across 3 dimensions: Converting Abacus existing policyholder relationships into managed wealth accounts in the Manning and Napier platform. Sourcing new life insurance policies through manning and Napier adviser network and accelerating distribution of Abacus related alternative investment products to manning and a peer's client base.

This investment represents a defining moment in Abacus' evolution from a life solutions originator to a fully integrated longevity focused alternative asset management platform. combined with our proprietary life Arc data and actuarial capabilities, the partnership completes the Abacus flywheel, connecting our Life Solutions origination engine our growing asset group and now a dedicated wealth distribution channel.

We are not simply acquiring a minority stake. We are building a longevity focused wealth ecosystem that we believe will generate significant and durable value for our shareholders. With all 4 verticals now in place and executing, -- let me walk you through what the long-term financial picture looks like. This is illustrative, but it is grounded in the same execution discipline that has defined in the past 11 quarters.

Here's the pathway. Our 2028 milestones are targeting EBITDA growth to $250 million while maintaining approximately 50% margins. supported by $30 billion in total AUM, recurring revenue divisions from 16% of revenue today to 60% of our total revenue mix. As we execute this shift, we align significantly closer to a peer set that commands materially higher valuations, and we expect that valuation gap to narrow accordingly.

Our 2030 milestones EBITDA approaches $450 million, supported by $50 billion in AUM. Recurring revenue divisions represent 70% of total revenue. That is an approximate 14x increase in AUM and a 3.5x increase in EBITDA from today, while maintaining approximately 50% EBITDA margins throughout.

Our long-term goal is to extend this trajectory, and we are looking at approximately $2.5 billion in revenue, $1.5 billion in EBITDA and roughly $150 billion in assets under management. These targets are not aspirational. They are backed by live pipelines, executed contracts and the same underwriting discipline this team has demonstrated for 2 decades.

Before I turn it over to Elena, I want to touch on capital allocation because it is central to how we create shareholder value. We deploy capital where risk-adjusted returns are highest, whether it is acquiring policies, funding asset management growth or repurchasing shares. Following our Q3 earnings, we announced a $10 million buyback program. Most recently, we authorized an additional $20 million share repurchase program on top of that, in addition to paying a dividend derived from our recurring net income. This capital return to shareholders through both dividends and share repurchases, reflects our continued confidence in the trajectory of this business.

When the market presents opportunities to buy our own stock, we believe is a significant discount to intrinsic value, we act. When policy acquisition spreads are attractive, we deploy there. It is dynamic. It is disciplined, and it is designed to maximize long-term shareholder value. I also want to address our securitization strategy because it represents an important lever for scaling capital efficiency.

In October, we launched our inaugural securitization. That transaction was fundamentally about education getting institutions, rating agencies and market participants comfortable with the asset class and its structural characteristics. The underlying asset and our securitizations is a life insurance policy issued by a rated carrier that is cash reserved with a default ratio of near zero. This is a consistent, high-quality asset that institutions want to own.

And critically, the yield is uncorrelated mortality-driven, not debt driven, like traditional private credit. -- that uncorrelated return profile is exactly what institutional portfolios are seeking in today's environment of elevated rates and credit uncertainty.

Securitization creates additional financing and distribution channels. particularly with banks and insurance companies, while improving our capital efficiency and scalability. We expect this pattern to grow into a meaningful and recurring channel going forward.

With that, I'll turn it over to Elena to walk through our investment performance and detailed KPIs. And then over to Bill on the financials.

Thanks, Jay. I want to use my time today to walk through the current investment environment, how our balance sheet performed and how we're continuing to build Abacus as a durable, scalable investment platform with growing fee-related earnings 1 where we see a clear path for recurring revenue to grow from approximately 16% of total revenue today to 70% over the next 5 years.

We ended 2025 in an environment that reinforces the core thesis behind everything we do at Abacus. Traditional asset classes, equities and fixed income, have become increasingly correlated. As a result, institutional allocators are actively searching for return streams that behave differently. That search is structural, not cyclical. It's driven by pension funds, insurance companies and endowments that need to meet long-duration liabilities with assets that aren't tied to the same macro forces.

Longevity linked, an asset-backed strategy fits squarely in that gap. Our returns are driven by actuarial outcomes and contractual cash flows, not by market sentiment or broader economic cycles. And it's why institutional demand for our strategies continues to grow.

Turning to the performance of our balance sheet. For Q4, our annual portfolio turnover was 2.6x, above our long-term target of 1.5 to 2x. Driven by meaningful capital inflows into our longevity-based funds and execution of our first securitization. What matters most is what that number represents, a disciplined, repeatable cycle of originating at attractive cost basis, adding value through underwriting and seasoning and monetizing at the right time.

During Q4, the policies we sold were held for an average of 116 days compared to 269 days for policies still on our balance sheet. Over the last 2 quarters, we have acquired a larger-than-usual number of policies referencing an older insured population. We did not deem those assets to need incremental seasoning. Thus a portion were also sold last quarter. The economics support that.

Our average realized gain was 27% for the quarter, and 32% for the full year. These margins reflect radios origination, accurate actuarial targets and patients while exceeding our target of 20%. Portfolio quality continues to be strong. Assets seasoned beyond 365 days had a weighted average life expectancy of 45 months and a weighted average insured age of 88 years versus 49 months and 86 years for last quarter, respectively. These positions reflect conviction in our underwriting, and we expect them to generate attractive returns as they continue to season.

During Q4, we deployed $230.7 million in capital off our balance sheet, bringing full year deployment to $580.8 million, up 82% year-over-year. Our origination platform reviewed more than 10,000 qualified policies during the year, and we remain highly selective. Our close rate of 12% vis-a-vis qualified policies reflect the selectivity we apply at the front end, which is ultimately what protects margins over time. As we enter 2026, our capital deployment pipeline is robust.

Our Longevity business remains the foundation of Abacus. At the same time, one of my priorities since joining has been to expand on that foundation in ways that are deliberate and additive. We launched our asset-based finance strategy, which I co-lead with Monty Cook, our Head of Private Credit. Monty and I have partnered on strategies like this over a decade, and we designed our ABF strategy, specifically to leverage what Abacus already does well.

Asset-based finance involves lending against or investing in pools of tangible and financial assets. insurance-related structures, equipment, receivables, consumer credit and other contractual cash flows. These investments generate current income offer structural downside protection and exhibit low correlation to traditional markets. What makes our positioning distinct is the intersection of 3 things.

First, our long-standing relationships with insurance carriers and institutional investors, for both clients of our longevity platform and natural allocators to asset-backed strategies.

Second, over 2 decades of experience, structuring and managing complex data-driven asset pools, where performance depends on granular analytics and disciplined risk selection.

And third, our proprietary technology, including the actuarial modeling and insurance analytics infrastructure we've built through Abacus Intel, which gives us differentiated risk assessment framework we intend to bring to ABF from day 1. This is not a departure from our strategy. It is an extension of the same origination philosophy, identifying contractual asset-based cash flows where we have a structural or informational edge applied to a broader opportunity set.

Asset-based finance is a $22 billion market, and we believe this strategy will be a critical part of our AUM expansion story. When I step back and look at the business today, the story is straightforward. We have a core origination engine and life solutions that continues to perform at a high level supported by disciplined underwriting and consistent monetization.

On top of that, we're developing a scalable asset management platform designed to generate growing fee re-weighted earnings for our longevity funds, ETFs, the ABF strategy and continued expansion of our distribution capabilities.

As of year-end, prepaying AUM was approximately $3.3 billion. and management fee revenue was $33.8 million. We're targeting more than $5 billion in fee paying AUM by the end of 2026. We and we see a path to $50 billion by 2030. That trajectory is driven by 3 things: continued expansion of our existing strategies the launch of new strategies like Asset based Finance and the strategic expansion of our wealth management and advisory capabilities.

Growing fuel-related earnings is a central priority. And it goes hand in hand with growing AUM. As we scale fee-paying assets across our strategies, we generate contractual high-margin management fee income, without requiring additional balance sheet capital.

I mentioned at the top, we see recurring revenue growing to 70% of total revenue over the next 5 years. That shift is intentional, and it is the single most important strategic objective for the company. It's about building a fee-related earnings base on top of a proven origination engine. And positioning Abacus to be evaluated the way other scaled alternative asset managers are evaluated.

We're executing on this deliberately step by step with a long-term perspective. And we believe that approach will continue to create value for our shareholders.

With that, I'll turn it over to Bill.

Thank you, Elena, and hello, everyone. As Jay mentioned, we closed out 2025 with another exceptional quarter of revenue growth and profitability. Our performance continues to be driven by the strength of our highly efficient origination platform -- while we also remain focused on expanding our verticals that we believe will contribute significant earnings growth over time.

In the fourth quarter of 2025, capital deployed increased 82% to $230.7 million compared to $126.5 million in the prior year. As of December 31, 2025, supported by continued policy origination and capital deployment, Abacus holds 804 policies with a balance sheet value of $469.8 million. Total revenue in the fourth quarter grew 116% to $71.9 million, compared to $33.2 million in the prior year period. Our growth was primarily driven by strong performance in Life Solutions, higher asset management fees and contributions from our technology services business.

We continue to see substantial growth from within our Asset Management segment as we expand our product offerings and the demand for uncorrelated assets increases. For the full year 2025, revenue increased 110% to $235.2 million compared to $111.9 million in the prior year.

Our Life Solutions segment continues to generate revenue growth at an impressive rate while we focus on diversifying our revenue mix moving forward into 2026 and beyond.

Turning to expenses. Total operating expenses, excluding unrealized and realized gains and losses, from changes in the fair value of debt were approximately $41.1 million for the fourth quarter of 2025 compared to $45.5 million in the prior year. The year-over-year decrease was primarily driven by a drop in noncash stock-based compensation, partially offset by an increase in SG&A expenses. The increase in SG&A expenses is related to the acquisitions at the end of 2024 and in mid-2025 along with increased marketing spend to strengthen our growth profile.

On an adjusted basis, excluding noncash stock compensation, business acquisition costs, amortization and change in fair value of warrant liability, net income for the fourth quarter of 2025 grew 71% to $23 million compared to $13.4 million in the prior year. For the full year 2025, adjusted net income grew 84% and to $85.7 million compared to $46.5 million in the prior year.

Adjusted EBITDA for the quarter grew 132% and to $38.6 million compared to $16.6 million in the prior year. Adjusted EBITDA margin was 54% for the quarter compared to 50% in the prior year. And for the full year 2025, adjusted EBITDA increased 115% to $132.6 million compared to $61.6 million for the prior year.

Adjusted EBITDA margin for 2025 was 56% compared to 55% for the prior year. We are committed to growing the business responsibly, which is demonstrated in our ability to grow both revenue and EBITDA by over 100%, while maintaining our EBITDA margins. GAAP net income attributable to stockholders for the quarter was $7.2 million compared to a net loss of $18.3 million in the prior year, primarily driven by the increase in revenue from our Life Solutions and Asset Management segments, along with a decrease in SG&A expenses.

Turning to our balance sheet metrics. For the full year 2025, adjusted return on equity and adjusted return on invested capital were both at 20%, underscoring our highly profitable business model. As of December 31, 2025, the company had cash and cash equivalents of $38.1 million, balance sheet policy assets of $469.8 million and outstanding long-term debt of $405.8 million.

As Jay mentioned in his remarks, in an effort to provide more insight into our business, we're initiating our full year 2026 outlook for adjusted net income to be between $96 million and $104 million. This range implies growth of up to 22% compared to full year 2025 adjusted net income of $85.7 million.

In summary, we are very pleased with our strong performance in 2025 as we delivered exceptional top line growth and significantly expanded profitability on an adjusted basis and maintained our EBITDA margin. We remain highly enthusiastic about the growth opportunities ahead and are well positioned to execute on our long-term plans.

With that, I will now turn it back to our CEO, Jay Jackson, for closing comments.

Thanks, Bill. Let me close with this. We have conviction in our business model. We have confidence in our execution, and we have clarity on the path forward. The current market environment is playing directly to our strengths and 11 consecutive quarters of outperformance of the proof. We recognize the disconnect between our fundamentals and our current valuation, but we also view it as one of the most compelling opportunities in front of us.

As we have discussed with our investors over the past several months, the challenge is not performance, it is perception. The real opportunity lies in helping the investment community fully understand what Abacus is today, a data-driven platform operating across life insurance, asset management, technology and wealth management with a recurring revenue model, institutional-grade assets and a track record that stands on its own.

We are addressing that gap as it continues to close through transparent communication, proactive investor engagement and relentless execution across every vertical of our business. That is our mandate for the next 2 to 3 years continued delivering results while closing the education gap and the broader investment community. We are confident that as understanding deepens the valuation will follow.

Our dividend and expanded share repurchase program send an unambiguous message. We have the financial strength, the cash flow generation and the conviction to invest aggressively in growth while simultaneously returning meaningful capital to our shareholders. We do not ask investors to choose between growth and returns. We are delivering both.

As we look ahead, our priorities remain clear and unchanged. And deliver strong, consistent financial performance, deepened institutional adoption of longevity-based assets educate the market on the massive structurally underserved opportunity in front of us and create enduring compounding value for every shareholder. I'm proud of what this team has built. The results speak for themselves. Our job now is to keep delivering.

With that, we will now open the call for questions.

[Operator Instructions]. The first question comes from Patrick Davitt with Autonomous Research.

You mentioned in the deck that you expect to do another securitization in the first half. And I think you said last quarter, you could have done a bigger one. So could you expand on how the investor demand side of the equation has evolved since then? And what that could mean for the size and frequency of these going forward?

Sure. Thank you, Patrick. The demand has continued to be there, and in fact, increase in -- we are in process in Q1 of measuring that demand against building another product to put out the securitization, and within that process, I think the demand has met or exceeded our expectations. And particularly in this market, right? Like one of the things we found really interesting is that with some of the recent volatility in the markets, the underlying asset that we have is actually increased in demand. But to couple that or to go with that, it's interesting too, we've seen uptick in origination as well.

So as individuals may seek capital from their life insurance policies, we're kind of seeing a positive response to both. So I think with the markets as they are today, relatively around some uncertainty and some volatility. That has presented, I think, more opportunity for us to potentially do something even more sizable. We're still targeting first half versus Q1, but we feel pretty good about the outcome there.

Is it fair to assume it could be bigger than the first 1 just based on what you said last quarter or too early to say.

Yes. That's -- yes. I think that's certainly the the goal and the target would be bigger. The first one was $50 million. And as we look forward, whether that's 100 or larger, those are some of the areas that we're targeting. And the demand is certainly there.

I would add one thing as well. whether it's in the securitization, which is great. Overall, I'd like to point you to the fund flow. If we look at the new inflows for Q4 that we reported, I mean, north of over $400 million should also give you a pretty good indication of the demand that we're seeing for the underlying asset.

Yes. And as a follow-up, I have a question on capital. I think you might have answered this in point 2 on Slide 7, but wanted to hear it from you. Before the stock sell-off last year, episodic equity raises were a more consistent part of the growth algorithm. So now that your stock price has recovered, is that something we should keep in mind or do you think that the organic capital generation has kind of reached an escape velocity in terms of being able to address the Life Solutions growth without equity raising?

Yes, we don't have any intent to put out more equity to fund balance sheet purchases related to policy purchases. For us, we are meeting that velocity and again, driven by the demand for the asset from our own funds as well. So we're in a really good spot here. and expect that to continue. And that's why when we put out our guidance for 26, we're what we believe to be very optimistic.

And so we expect that to continue. And from a fund flow perspective and what drives those capital needs. We think that we're in a great spot here, and there's not any need to go to equity markets.

The next question comes from Crispin Love with Piper Sandler.

On capital deployed, definitely a big quarter there, $230 million. I think that's 125% plus growth versus just last quarter. And well, Life Solutions revenue was strong, and of course, didn't match that growth. So can you walk through that a little bit? Did it come at a lower margin? And how was that capital deployed different than past quarters. Just curious if there's any major differences.

Right. No, there wasn't anything different. Now there was some -- when we look at that gross capital number, there was $408 million total of gross inflows. One thing that, yes, you right to pick up on at least how we break that down. There is a little over $100 million that was just on the ETF side. So that would contribute to -- typically, those ETFs have a lower management fee as well as additional recurring revenue fees just in general.

And so then when we then look at just the longevity market asset or inflows, those were higher than Q3. And just in general, I think what we saw there was that some of it's just allocating that capital during the quarter, right? And so you did see that we also had some excess cash there as we were finishing out the quarter. And so I think that those will kind of couple themselves together again a little more closely as we get into first half of this year, Q1, Q2. But otherwise, it was really successful.

We were able to put a large piece of that capital to work effectively right away. We are meeting certainly, the demand that we have with our origination, and you saw a pretty significant uptick in capital deployed as well, which we were -- I think 1 of the highlights of the quarter is when you look at the capital deployed number of over $230 million.

Great that makes a lot of sense on the ETF side. And then you've talked about a 5-year path to $450 million in adjusted EBITDA. I think you had a little over $130 million in 2025. So if I'm doing the math, I think that's compounding adjusted EBITDA about 28% per year. Can you just discuss how you expect to get there? Is that all organic? Are there acquisitions involved? And then is asset management, the overwhelming driver of that growth?

For sure. And I'm glad you asked that because one of the things we highlighted in the call here was that -- if you look back over the last 3 years, and I sat back with most of our shareholders and said we expect that the Rx growth, top and bottom line, you probably would not have taken us very seriously. And yet here we are again, looking forward 3 and 5 years out with similar aspirations. And that's why we put that illustrative target out there.

And partly driven by a couple of things. One, let's not forget, we do have a massive addressable market with the underlying Life Solutions business. But even beyond that, when you look at some of the key drivers there, absolutely, it's driven by asset management. It's driven by wealth management. And there is a blend of organic as well as acquisition.

And when I think about the acquisition piece, we highlighted a minority investment in just a terrific firm, 50-year firm in Manning and a peer where culturally, we see things a lot of the same way. And that's a first entry point for us. And I think when you start to look at the synergies that we're going to -- that we have with that firm already and some of the things I believe we're going to be able to do to jointly grow together, things like increasing assets under management for both parties by having both a distribution agreement and being able to monetize the lead gen that we're able to generate from our platform through Manning is incredibly exciting.

And I think when you look then at the growth of our business and how we're able to achieve these growth numbers, it's what we're doing really well going forward is capitalizing on the life cycle of our clients. And we're generating significant value for them in both policy purchases and policy payouts. And now we're going to monetize that over time. And so the growth of this asset, driven by our data specifically longevity of lifespan data and how that applies to financial planning. Yes, we are very excited about how that growth is going to continue.

And now looking forward, I also think that it's -- as I said in prior calls, we saw both ways from a build it and buy it. So I think we'll see some of that happen internally. And then in addition to that, finding phenomenal companies that we can invest in, such as Manning and a peer and continue that growth.

Next question comes from Andrew Kligerman with TD Cowen.

So maybe kind of further to the earlier capital question. In terms of equity issuance, would the founding holders have any appetite to do it this year? Or do they have more of a sense that they want to wait and see if the price stabilizes, -- what's the thinking there?

And just further elaborating on that question as well. In terms of capital demands, it sounds like you did a really interesting acquisition with Manning. What's the pipeline like there? Is there any way, Jay, that you could kind of size to get a sense that maybe you might need to issue equity to do some of the deals. It sounds like they've all been very impactful.

Sure. Good questions. We'll start with the initial question related to we are predominantly inside our owned, so remain that way, myself and 3 other partners and as well as a large shareholder, the 5 of us own about 58%, almost 60% of the outstanding shares. I think it's a fair question. Just because we've seen a recent performance in the stock price, I would just like to highlight that -- when you look at the valuation of our business, it's why we're buying back our stock because we still feel it's dramatically undervalued on a comparative basis. I mean when you look at businesses on an equivalent basis that have put up these types of numbers in '25, they don't trade at single-digit multiples. Yes, here we are.

And I think that when you look at this from a perspective of how we feel about the stock, just look at the numbers we put out, some of these targets for 2028, again, they're illustrative, but we're talking about effectively 2x over the next 3 years just in EBITDA, while maintaining similar margins. So I think over time, we have got a business here where some of the founding members have held their shares for 22 years.

And I think that as a thoughtful basis, if we were to ever do anything, it would be something that would be to meet excess demand for the stock. And if that were to happen, we would certainly consider that as those folks are thinking about things like retirement and other things. And this happens in all companies, right? Like as people kind of age out, there's -- you want to be able to do this in an organized way. What I can assure you is that if there were to be a consideration related to some equity being sold by insiders, it would be in a controlled fashion, it would be in an organized fashion. And -- but to highlight even more so, let's look at the numbers where we are today, there's not a huge incentive for us to do that, right? We see a lot of run room left here, and we think that we should be taking advantage of that.

The second part of your question was what our pipeline looked like. And you bring up an interesting point as we evaluate, and we have spoken about this for a year about opportunities that we think would be really good fit, both culturally and financially for Abacus where you can find true synergies, right? Like let's take a quick look at the manning and the peer opportunity. This is a strategic alliance where we're going to help generate new private wealth clients through our own client base.

Secondly, we're going to source new policies from their current client base. So that feeds the origination machine, right? And then we're looking at our own asset management portfolios, these are terrific alternative asset management funds that are now going to be available to manning clients. Those are the types of successes that we want to point to and why these synergies, we think, would be very appealing. In addition to that, are there other firms that might meet that type of description.

Of course, there are. And we are engaged in those kinds of conversations, but it's got to be accretive to shareholders, right, both financially as well as synergies. And there are firms out there. We're just very patient, very diligent. But I can tell you that there is a pipeline, and we're excited about it. How would we use capital to best fill that pipeline or to work through that pipeline? I think that we would use the best resources possible to us. If it were equity, I think it would be a blend of equity and really smart debt structuring, but there's a lot of options open to us.

Let's keep in mind, we have a very profitable balance sheet. And we can utilize that capital in the most strategic way that we can, which we think will drive long-term returns. And that's what we were saying earlier, right? Like we want to use the capital in the best way possible, whether that's buybacks, whether that's buying policies or whether that's acquisitions or investments. And I think that Q4 and '25 and what we're putting out for 26 demonstrates that.

That's helpful, Jay. And then on the KPIs, I mean, the turnover ratio at 2.6 terrific number of days till policy hold 116 terrific again. I mean really good changes there. Kind of curious on the days held 269, which upticked a little bit. What's kind of the backdrop to that? Why holding those policies a little bit longer?

Yes. And if you compare it to the prior quarter, we had held some policies a little bit longer to maximize revenue. And for us, it's simply about managing the best opportunistic return that we can. And so many times when you see that movement a little bit, whether it's held us slightly longer or not, it's a smaller percentage of the book, but that's an aging part of the book, and you want to maximize returns.

I think that you can look in the Q this quarter and even the K and you'll see things like maturations and these are mature contracts where we were able to effectively collect on the entire claim. And in those circumstances, those returns are substantially higher. So some of those contracts are best seasoning, whether that's an additional quarter or not, and some are best to be optimized within that quarter.

So it's a very thoughtful strategy of looking at it going, do I pick up an ROE of, let's say, $20 million or do I hold this for maybe something larger another quarter? And in Q3, what you saw was those trade spreads went up pretty high. That was one of the KPIs that you had mentioned yet, but the KPI was 37% and in Q3 and then 26% in Q4. I think that you're going to see some of that, and that's part of just being really good stewards of capital and maximizing returns.

The next question comes from Timothy D'Agostino with B. Riley Securities.

Congrats on the year. I guess focusing on Abacus Intel quickly. You had mentioned in your prepared remarks about how governments are using the data. And on Slide 19, you kind of lay out 100-plus governments and union systems. But you also talked about and I can see in the slide, the market opportunities, whether that be TPA, pension funds, insurance, mortgage lenders. I guess what I'm trying to understand is -- with this data and Abacus, how do you provide value to those different opportunities and why they would want to partner with you? I guess, trying to get an overall kind of high-level understanding of why Abacus Intel can provide value to these opportunities?

Sure. I mean at a high level, when you look at pension funds, for example, one of the resources that Abacus provides is called MVerify or mortality verification, and we're able to verify when a mortality occurs in the United States within 48 hours with nearly 100% accuracy, around 97%. And that is incredibly valuable data for a pension fund, so they no longer continue to make those pension fund payments.

Therefore, what that really helps is to manage their own balance sheet much stronger because they don't have money going out. That's really hard to reclaim and then you can apply that against different types of agencies, right? To have a better understanding from an insurance company point of view how their mortality curves might adjust based on real-time mortality information.

The reason why that's so valuable is that it's really hard to get that information from other sources, even the social security administration, that can take months, if not years, to get that data. And most of the time, it's not very accurate. It's half is accurate. So that's where those sources of demand are. We've been speaking to the larger institutions. And as we look into '26, we expect the Abacus Intel business to continue to grow.

I would add one piece that's really valuable. We use that data, right? It helps us build better prediction models around our own investments. So being able to capitalize it and understand how longevity and how that life arc of an individual is managed, right? One of the things we started saying is that lifespan is not a straight line. It's an arc of possibilities. We have a program coming out called Life Arc, which that Life arc program will help us better understand what someone's mortality distribution curve looks like.

And we're going to apply that LifeArc to financial services. right? If the #1 fear is running out of money in retirement, shouldn't we -- shouldn't people have a better understanding of how long they're going to be in retirement and capitalizing on that longevity and health data. And that's the type of data that I think in a much larger scale we're going at that Abacus Intel is going to play a major part in.

Okay. Great. Super helpful. And then I guess a quick second question for me. In the third quarter earnings presentation for the Abacus Asset Group, you've laid out $4 billion plus in fee-paying AUM by year-end '26. That number is obviously -- your guidance increased to $5 billion for year-end '26. Is that primarily due to the capital inflows you saw in 4Q '25, that $275 million? Or was there something else? Just trying to understand what gives you confidence in increasing that number between the earnings calls.

Sure. Yes, thank you for asking. And yes, it is driven by what we deem to be visible demand. And so when we see the type of demand that we saw in Q4 and then we're looking at the demand in Q -- or excuse me, 2026 and matching that with a keen understanding that when you have volatile markets, demand increases for this kind of asset gave us a lot of comfort around increasing that number.

And then you tie into not just new funds products, and the rollout of additional potential securitizations, we feel comfortable around that number.

Next question comes from Mike Grondahl with Northland Securities.

Congratulations. And I just wanted to circle back to the capital deployed $230 million. I think you did that securitization late October. Was any of the $230 million for the securitization you've already done? And is any of that can be broken out for a future securitization? Any way to think about that?

And the second part of that question, sorry, Mike, you cut out a little bit on my line.

Any of the 230 that can be used in the future securitization -- are you bifurcated in that way?

Yes. No, the way to look at it is that, yes, in Q4, when we're looking at total capital deployed that would include the $50 million that we had in the securitization. But in addition to that, it was still a record quarter for us right and I think that's part of the power of the securitization, right? Like you just kind of have this really consistent model that you can deploy capital with a very effective at a very effective and cost-effective structure.

As far as bifurcating that capital deployed into additional securitizations, I would just kind of point to our balance sheet at this point, which is north of $450 million of policies on the balance sheet, and we have excess capacity to do additional securitizations. So I think that we're really well positioned as we look forward to additional securitizations. We already have the inventory built up on our balance sheet for that.

Got it. Great. And then just one more. with Manning and the peer, does that sort of replace your ABX wealth adviser strategy. There was some thought that you'd be hiring some of your own advisers and grow it out that way. How do we think about it now?

Yes. I think it certainly complements everything that we thought we were going to do. And I think just one big take away here is that we definitely walk before we run here. right? We made, I feel like a very thoughtful, intelligent, conservative investment into a well-established firm to really take a moment and show that and demonstrate that the model that we're putting together for our Wealth Management division is executable.

And I think that's just so valuable in this way that we structured this initially. So this investment makes a ton of sense for us how we might move forward with our own advisers within that platform. I think it makes sense for us at this point to focus on the investment that we made and proved that that is successful and show some wins and successes and then we'll continue to build the platform from there. But make no mistake, this is going to be an important platform for us on a go-forward basis because if you think about it, it feeds so many other things, right? It feeds origination, it feeds asset management. It feeds the Abacus intel from the longevity data. So I think it's a really important stage for our growth, and this is just the first step.

This concludes the question-and-answer session. I would like to turn the conference back over to Jay Jackson for any closing remarks. Please go ahead.

Well, thank you to all of our shareholders. 2025 was a year in which I believe that we solidified our shareholder base, solidified our story and our communication and solidified our growth. And we are in a position where on a looking forward as great the last 2 and 3 years have been. We are excited about the next 3 years. And we hope that when you start to see these numbers and see the direction of where this company is headed and where we can achieve with the foundation of our business, we're excited about what the next 3 years can bring to us and our shareholders as well. So thank you all.

We look forward to answering any additional questions, please feel free to reach out to our IR department if you have any additional questions. and we look forward to another great quarter.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Abacus Global Management Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Rob Phillips, Abacus Global Management's Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you, operator, and thank you, everyone, for joining Abacus Global Management's Third Quarter 2025 Earnings Call. Here with me today are Jay Jackson, Chairman and Chief Executive Officer; Elena Plesco, Chief Capital Officer; and Bill McCauley, Chief Financial Officer.

This afternoon at 4:05 p.m. Eastern Time, Abacus Global Management released its third quarter 2025 results. This afternoon's call will allow participants to ask questions about our results.

Before we begin, Abacus Global management refers participants on this call to the Investor web page, ir.abacusgm.com, for the press release, investor information and filings with the SEC for a discussion of the risks and uncertainties that could affect the business.

Abacus Global Management specifically refers participants to the presentation furnished today on Form 8-K with the Securities and Exchange Commission and to remind listeners that some of the comments today may contain forward-looking statements and as such, will be subject to risks and uncertainties, which, if they materialize, could materially affect results. For more information on the risks, 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. 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. 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.

With that, I'd now like to turn the call over to Jay Jackson, Chief Executive Officer.

Thank you, and good afternoon, everyone. I'm pleased to report that Abacus delivered another record quarter, our 10th consecutive quarter of beating consensus projections, keeping us firmly on track with our long-term growth targets. Our third quarter results were just as impressive.

Total revenue increased 124% year-over-year to $63 million. Adjusted net income rose 60% to $23.6 million and adjusted EBITDA increased 127% to $37.9 million. Due to these strong Q3 results, we are once again in a position to increase our 2025 guidance to $80 million to $84 million, resulting in a year-over-year growth of 72% to 81% for 2025.

I want to highlight an important inflection point for Abacus that further reinforces our commitment to long-term shareholder value creation. Earlier today, we announced the initiation of an annual dividend of $0.20 per share and a $10 million share repurchase program. These actions represent a defining moment for Abacus, underscoring both our confidence in the strategy and its validation as we continue building durable recurring earnings.

Our balance sheet and cash generation are at record levels, supported by increasing capital inflows into our longevity funds, growing fee income and expanding margins. As stated in the release, we have the capital strength to fund ongoing growth through new originations, accretive acquisitions and technology investment. While also returning capital to shareholders. I'm incredibly proud of what our team has built and the position of strength their unwavering dedication has created for Abacus.

The introduction of a dividend and buyback is not a shift in strategy, but a natural evolution of it. With reoccurring revenues expected to approach 70% of total revenue over time, our capital allocation framework is designed to balance growth investment with consistent shareholder returns.

Importantly, these actions also further align Abacus with leading public alternative asset managers, many of whom have long demonstrated that recurring fee-based earnings can support both strong growth and meaningful capital returns. This disciplined approach ensures we continue to scale our platform, strengthen our market position, and allow shareholders to directly benefit from the visibility and sustainability of our earnings.

I think it's important to take a moment and reflect on where Abacus stands relative to our public asset manager peer group. The numbers tell a clear story, one that I believe deserves your close attention. When we look across our peer group of publicly traded alternative asset managers, Abacus' performance continues to stand out across key financial metrics. We lead our public peer group in year-over-year revenue growth by 5x. Abacus' revenue of 124% year-over-year. By comparison, other public alternative managers reported average year-over-year revenue growth between 20% and 30% during the same period. These aren't projections or aspirations. These are results we're delivering today quarter-after-quarter, demonstrating both our market leadership and the depth of our growth opportunity.

Abacus' growth trajectory remains the strongest in the asset manager industry and is expected to continue outpacing public peers, driven by disciplined execution, strong origination and increasing investor demand for uncorrelated returns. The company's accelerating fundamentals, combined with increasing visibility, highlight a clear path towards sustained value creation that sets Abacus apart.

When we look at the broader valuation picture, the disconnect becomes more pronounced. The average publicly traded alternative asset manager trades at roughly 20x projected 2025 earnings. Abacus trades in the mid-single digits. This disconnect represents a deep discount to our peer group and an opportunity for investors.

While valuation comparisons have their limits, the combination of strong fundamentals, consistent execution and short-term share price dislocation reflects a familiar dynamic, one that historically corrects itself in favor of fundamentals.

At Abacus, we are continuing to diversify our revenue with increased assets under management. Year-to-date, we have raised $468 million across all of our fund strategies and Q3 inflows represented $102 million. We are committed to increasing our AUM and generating a greater portion of our total revenue from recurring fee-based revenue, which naturally commands higher valuations.

Now let me be direct. I take responsibility for ensuring the market fully understands this evolution. While we're executing operationally and consistently exceeding expectations, we have more work to do to communicate the depth of our business model and the durability of our results.

Beginning with last quarter's results, we introduced new KPIs specifically to simplify our message and to make the Abacus story more transparent and accessible. We're committed to clear, consistent communication that helps investors understand what drives our business and how we measure success together.

We also made significant strides in expanding our investor outreach program. Between now and the end of 2025, we're continuing into 2026, you'll see Abacus represented at more conferences more speaking engagements and increased visibility through television and media advertising, our management team remains fully accessible and engaged across both institutional and retail channels, prioritizing transparency and long-term relationship building.

We're also advancing strategic accretive acquisitions that enhance our competitive position and broaden both our origination and global wealth platforms. The recently announced acquisition of AccuQuote is a clear example.

AccuQuote, a premier online life insurance brokerage provides customers with quotes from multiple insurance providers through a single digital platform. This transaction is strategically and financially accretive, adding a new digital origination funnel, expanding our client life cycle coverage, and supporting accelerating growth in policy origination and asset acquisition volumes.

Near-term, AccuQuote contributes modestly to revenue and profit. Over the long-term, it will serve as a scalable growth engine feeding directly into our underwriting and asset management businesses. Our strong free cash generation and high returns on invested capital gives us the flexibility to continue funding strategic initiatives while returning capital to shareholders.

Let me address the current market environment. Our longevity-based assets are fundamentally uncorrelated to traditional markets. Their performance is driven by actuarial and demographic trends, not market sentiment or interest rate cycles. This structural differentiation provides consistent noncorrelated exposure at a time when diversification is most needed.

To that point, we achieved a major milestone following quarter end with a $50 million above investment-grade securitization product note backed by life insurance assets sold to institutional investors, insurance companies and banks. This transaction marks the beginning of a scalable and reoccurring funding mechanism while validating the strong institutional demand for longevity linked less correlated assets.

It also reinforces Abacus' position as the market leader in a highly regulated industry, supported by favorable demographic trends expected to persist for decades. We view this transaction as the first of many as we continue building the infrastructure to make it a repeatable and scalable component of our long-term funding strategy, lowering our cost of capital, expanding our distribution channels to banks and insurance investors, converting balance sheet assets into recurring service and fee-based income and further enhancing profitability and return on equity.

To summarize, the financial performance is clear. 10 consecutive quarters of strong earnings growth, industry-leading returns on capital, expanding recurring revenue and a defined path towards greater visibility and scale. Our focus remains on translating these fundamentals into long-term shareholder value.

With that, I'll now turn the call over to Elena Plesco, our Chief Capital Officer, to discuss our key performance indicators and capital structure in more detail.

Thanks, Jay. I'd like to highlight some recent strategic milestones and then discuss our balance sheet efficiency metrics and KPIs.

As Jay mentioned, we announced a significant milestone on October 22. We successfully sold $50 million of securitized life insurance assets structured as an investment-grade rated collateralized note with a mid-single-digit yield. This transaction represents a strategic break for Abacus on multiple fronts.

First, it establishes a new institutional distribution channel that complements our existing monetization pathways, allowing us to access a broader universe of capital providers, including banks, insurance companies and fixed income investors who typically require rated structures.

Second, it validates our underwriting and portfolio construction capabilities. Specifically, the ability to secure an investment-grade rating demonstrates that our credit and actuarial processes meet institutional standards.

Third, this transaction creates a scalable template for future execution, potentially improving our overall capital efficiency as we develop a track record in the securitized products market.

Finally, by demonstrating that life insurance assets can be packaged into rated instruments with mid-single-digit yields, we're effectively expanding the addressable market for these assets and reinforcing Abacus' position as a leader in bringing institutional-grade structures to the longevity space.

This is not just a onetime financing event. It's a proof of concept that opens up significant optionality for how we think about asset monetization and balance sheet management going forward.

Now turning to our operational metrics. Last quarter, we stated that our long-term target for portfolio turnover is 1.5x to 2x. For Q3 2025, our annualized turnover ratio was 2x, in line with expectations. Another key indicator of our balance sheet management efficiency is our ability to monetize seasoned policies at optimal timing.

In the third quarter of 2025, policies we sold have been held on our balance sheet for an average of 363 days compared to 253 days for policies still owned, underscoring our ability to efficiently rotate mature inventory while preserving overall portfolio quality. This 110 days delta for sold policies validates our proactive approach of realizing gains on well-seasoned positions rather than engaging in reactive selling. This metric clearly demonstrates that we're managing the balance sheet strategically rather than simply turning newer acquisitions.

As we've discussed previously, some assets spend a longer period than our balance sheet. Those are our best ideas. At the end of Q3 2025, 19.6% of our total portfolio value, including cash, was held for over 365 days. These seasoned holdings maintain a weighted average grade reflective of their low risk and strong credit profile, weighted average life expectancy of 49 months and weighted average age of 86 years, underscoring the quality of our long-term hold decisions. This concentration in our best ideas reflects our disciplined approach to portfolio construction and our confidence in our underwriting capabilities.

Finally, while portfolio turnover demonstrates capital efficiency, profitability of our sales is equally important, measured by the difference between what Abacus paid to originate a policy and the actual sales price received. Our average realized gain on sale for Q3 2025 was 36.9%.

As you can see this quarter, we have been able to resell inventory that we have purchased a year ago during a different interest rate environment, validating our strategic balance sheet management approach and rigorous cost discipline through our operations.

With that, I'll now hand it over to our CFO, Bill McCauley, to discuss the specifics of our third quarter results.

Thanks, Elena, and hello, everyone. As Jay mentioned, we delivered another outstanding quarter of revenue growth and profitability. Total revenue in the third quarter grew 124% to $63 million compared to $28.1 million in the prior year. This growth was driven by strong Life Solutions performance, increased asset management fees and contributions from our Technology Services business. Our Life Solutions segment continues to benefit from our highly efficient origination platform and active trading division.

Capital deployed increased 10% to $102.4 million in Q3 compared to $93.2 million last year. Beyond deployment, we had another strong quarter with regards to realized gains. Realized gains for Q3 2025 were $46.4 million, which was primarily driven by the sale of 282 policies to 17 different counterparties. As of September 30, we hold 522 policies valued at $424.7 million on our balance sheet. Based on historical track record, we expect to monetize these assets within approximately 6 months with spreads averaging above 20%.

We continue to be pleased with our asset management segment, which is now in its third full quarter following the Q4 2024 acquisitions. This business generated $8.6 million in revenue during Q3 and had $102 million of new inflows, demonstrating the value of our strategic M&A activity.

Turning to expenses. Total operating expenses, excluding unrealized and realized gains and losses on investments and the change in fair value of debt was $32.9 million compared to $19.4 million in the prior year. This increase reflects operating expenses of our acquired companies, increased G&A, higher depreciation and amortization and strategic marketing investments to support our growth trajectory. We typically see returns on marketing spend within 90 to 120 days.

On an adjusted basis, excluding noncash stock compensation, business acquisition costs, amortization and changes in warrant liability fair value, net income was $23.6 million compared to $14.7 million last year. Adjusted EBITDA grew 127% to $37.9 million versus $16.7 million in the prior year, with margins of 60.2%, consistent with the comparable period.

GAAP net income attributable to stockholders was $7.1 million compared to a net loss of $5.1 million in the prior year. This improvement was driven by higher revenues across all segments, which is partially offset by increased operating costs and interest expense.

Our balance sheet metrics continue to reflect our highly profitable business model. Annualized adjusted return on equity was 22% and annualized adjusted return on invested capital was 21% for the quarter.

As of September 30, we held $86.4 million in cash and cash equivalents and $424.7 million in balance sheet policy assets.

As Jay mentioned in his opening remarks, given our strong performance through September, we are raising our full year adjusted net income guidance on a gross basis to a range of $80 million to $84 million, up from our prior range of $74 million to $80 million. This represents growth of 72% to 81% compared to 2024 adjusted net income of $46.5 million.

In summary, we continue to deliver record revenue growth while significantly expanding profitability on an adjusted basis. Our diversified business model is performing well across all segments, and we're well positioned for continued success.

I'll now turn it back to our CEO, Jay Jackson, for closing comments.

Thanks, Bill. Before I turn the call back to the operator for your questions, I want to close by reinforcing what makes Abacus unique. We are executing with discipline and purpose in one of the most compelling corners of alternative asset management, longevity-based investing.

Our results continue to speak for themselves, record profitability, consistent growth and expanding market recognition. At a time when investors are seeking stability and true diversification, Abacus stands apart, offering uncorrelated assets, scalable returns and a platform designed for sustained value creation. The disconnect between our fundamentals and our current valuation is clear, but it also represents one of our greatest opportunities.

We're addressing that gap head on through transparent communication, active investor engagement and continued execution across every part of our business. And further to this point, our dividend and buybacks and a clear message. We have the strength, the cash flow, and the conviction to invest in growth while directly returning value to shareholders.

As we look ahead, our focus remains unchanged, deliver strong financial performance, deepen institutional adoption of longevity-based assets, and create enduring value for our shareholders. I'm proud of what our team has accomplished, and I'm even more excited about where we're headed.

With that, we want to thank you for joining our call today and look forward to your questions.

[Operator Instructions] The first question today comes from Patrick Davitt with Autonomous Research.

First, I have a few questions on the securitization. Firstly, are there any incremental economics for you other than just the gain on sale like a structuring fee or a transaction fee?

Secondly, could you give us an idea of how many large institutions participated and what portion of those were new to the asset class?

And then finally, is there an opportunity to package more of these into some sort of third-party asset management product that you could charge fees on?

Patrick, thank you. First of all, on the securitization, the first question was related to additional fees or outcomes that we may experience. And one thing to note is that we also remain the servicer of the underlying assets. So we will retain servicing fees on these assets on a go-forward basis, which ultimately produces additional fee-related earnings associated with that.

And what we stated to in both the initial press release and even going forward is that we expect this particular type of structure to continue to grow and be very successful. It was very well received. We purposely chose to make it a little bit smaller offering initially with $50 million. We had excess support of that or excess demand rather, where we could have done larger product here. But when we were considering the partners that we wanted to do this with, all of the partners were new in effect of investing directly into this type of collateralized product. So we were very encouraged by that, and they consisted of both insurance companies and commercial banks.

So to that end, I think that, that was a really a piece to this that was incredibly successful, right, as you have new adoption of the asset. And a lot of what they were looking for was this uncorrelated or less correlated yield in a rated structure. So we see this continuing to grow as another type of distribution that we would be able to use to sell policies into and really aggregate policies into at an incredibly, I think, competitive cost of capital, which is also very, very compelling to us. And then I think the last piece of that was we see this structure growing into other third-party funds.

Certainly, taking that into consideration, there's been interest from other types of structures and vehicles who are looking for this kind of product even within their own third-party funds. So I think as we continue to move forward, what was important was that getting this first one done was incredibly valuable being that now we have the platform in place to where effectively we can rent and repeat and do it over again and even larger in scale, which we anticipate doing on a regular basis. And I would expect to see more of these more consistently than we're trying for every quarter or every 2 quarters is kind of the target there.

That's helpful. As a follow-up, the advertising blitz has broadened, it feels like in the last couple of months to the point where I feel like Jay is living in my apartment on Sundays when I'm working from home. So maybe you could update us on any KPIs you might have on that effort converting to real volumes. Like how are you measuring the success of what looks like a fairly big uptick in the marketing investment at this point?

Sure. Thank you, Patrick. And we typically will -- you'll typically see a larger advertising attempts as we get more into Q4. We've seen that to be typically a larger quarter for us in relationship to our origination. And it brings me to my point that if you look at Q3, and compare Q3 to Q3 of last year, we're actually up 10% on Q3 over Q3 of last year, and then we kind of ramp into some of that advertising coming into Q4 as that's historically been a very productive quarter for us. So while I apologize for living in your living room, I certainly don't apologize from a revenue point of view because it's working. So that's great news. And we'll try to turn them off in your ZIP code.

The next question comes from Crispin Love with Piper Sandler.

First, just on capital deployed, $102 million in the quarter, below the second quarter, but still able to put up really solid life settlements revenues. Was that driven primarily from the outsized average gains in the quarter or anything else there? Just curious on some of the puts and takes there. And then forward expectations for capital deployed, is $120 million a good run rate? Or how are you thinking about that?

Sure. And yes, you're exactly right in the Q3. If you noticed the adjusted EBITDA margin increased to the highest EBITDA margin that we've ever had over 60%. And yes, we were a little more strategic in Q3 where we saw some very interesting opportunities, put that money to work.

And historically, we've seen sometimes when you look at Q3, particularly as you're coming towards the end of the summer months, you've got a little bit of a shortened period there and then teeing up for Q4. So we're actually quite pleased where Q3 ultimately came out and with the increase in margins, just made a ton of sense to us. But we're -- how we strategically deploy capital, we still want to be very thoughtful and very smart about it.

And then on a go-forward run rate basis, yes, as we look at Q4 last year and compare Q4 to this year, our expectations that we'll continue to see this maintain and grow from here. Some of that is capital dependent on based upon new capital that we're obviously raising within our funds, but not just that, but also demand.

And we're seeing a pretty high uptick in demand from institutional capital who want to access this asset class due to the underlying nature of the asset class being that it's an uncorrelated yield. So as more volatility in the market gives us more opportunity to not just originate policies as people are seeking liquidity, but beyond that, build larger portfolios for investment funds who are seeking to capitalize on this asset within their own funds. So we expect that to continue to grow.

We are definitely out there, as Patrick had alluded to quite often increasing our ad spend, and we're able to capitalize that, I think, in a successful way. And from the one -- whether that's going to be $120 million or slightly above or below that, what we see in Q4 or even going forward, I think that, that's a fair run rate, but we are obviously driving on a consistent basis to increase it. And we're always looking to increase it. I mean if you look at this number over the last 2 years, I mean, I think we're at 2x or even more on that number. And at some point, you go 1.5x to 2x to where we are today, we're starting to see some normalization and predictability around as we predict capital. However, as more opportunities present themselves over the next, I think, 6 months to 1 year, we could see that go up.

Okay. And then just on the maintaining and growing from here, you kind of maintaining growing off of the $102 million in the third quarter. Is that fair?

Yes. I mean, I think I would look at it if you look at Q4 of last year, right? And even if you look at looking at Q2 where we were north of 120, I mean, I think that's a fair way to model as you're looking at where we think we would potentially be in Q4.

I think that on top of that, though, there are some opportunities that we see in the market as we continue to utilize thought processes around new structures like securitizing or using a securitized type format in this asset, Crispin, will have, I think, a significant impact on that capital deployed number, right? I mean those 2 will ultimately go hand-in-hand as you have cheaper cost of capital or lower cost of capital, that's going to impact even how much more you can originate. And so we would expect that growth to continue.

Perfect. I appreciate all that. And then on the new dividend, can you share yours and the Board's thoughts on that discussions you had versus just deploying excess capital into buying more policies or more buybacks or having a more nominal dividend. But just curious on your view on capital allocation, dividend buyback deployed to capital.

Sure. We put a lot of thought into the dividend. And as a business, as an asset manager, it's not unusual for asset managers to pay dividends. And one of the things that you'll see is that as our recurring revenue continues to grow as a percentage of the recurring revenue, we're right in line with other asset managers and what type of dividend would be paid.

And if you compare that against, for example, our adjusted net income, we're on very much the low side as conservative. I think as you would see out there in the low 20s as a percent of adjusted net income as 8% for that dividend. So we felt like from a dividend perspective, this was a way to capitalize our shareholders in a very thoughtful way and not pulling anything away from the opportunities that we had to acquire new contracts.

We're targeting this year, Crispin. If you look at our new guidance, we're looking at 80% year-over-year growth and a small dividend. I think that our shareholders are getting the best of both worlds. And that's not pulling back from our growth at all. We're continuing to expand and continue to see our growth.

And as we looked at our liquidity and then we looked at our reoccurring revenue, we felt as a company that is maturing over time into a larger fee-related earnings business that the logical next step for us was to pass those additional earnings on to our shareholders in the form of dividend, and we'll pay that dividend on an annual basis.

And as we highlighted in the press release, it will be based upon, again, a very conservative metrics as a percent of less than 25% of our adjusted net income or 55% of our recurring revenue.

All right. Great. And sorry, just one clarification. So will it be paid quarterly or it will be an annual payments?

That's an annual payment. And you bring up a good point. We purposely chose to make it an annual dividend versus a quarterly so that we could opportunistically reinvest into some of these higher ROEs throughout the year and then ultimately pass that dividend on to our investors. So it was a way for us to maximize our growth and capital while still providing a dividend and capitalization to our shareholders.

The next question comes from Mike Grondahl with Northland Securities.

Congrats on the securitization in the quarter. You gave a lot of good insight into the securitization. Could I maybe get you guys to go one step further? And with that $50 million securitization, could you kind of talk about unit economics and revenue and adjusted EBITDA that comes from that transaction, just so as we think about 2026, whether you're going to do one every other quarter or one every quarter, we can just kind of get a sense for how it lifts the business.

Sure. Thanks for the question, Mike. And the way to think about it is that when you're looking at the unit economics on a securitization like this, I think it's fair to say that we will be able to capture servicing fees as we would normally capture in this kind of product on a go-forward basis, right?

So the way that I would compare this to on a unit economics basis, you actually see this as our -- it's equally profitable as a sale. I mean it is a true sale to a securitization in the way that we've set this structure up. And so those unit economics exist. This is just another structure that we're able to utilize to capitalize on that true sale and policies.

So when you look at our ROE and ROIC, those numbers would effectively be an indicator as to how we're managing the unit economics of the securitization because those policies are being sold in a true sale to that vehicle. So I hope that makes sense. But the unit economics for us are very compelling as they are for our business.

What I think the securitization does really long-term is that it offers us more consistency over time when you think about when we're asked frequently about maintaining the strength of our ROEs and ROIC, this structure provides that over a very long period of time. And I think that's one of the things I'm just really excited about. And as people look at our profitability or our margins, I think that this is a great structure that will allow us to maintain that profitability and margins for years to come.

Great. And then it looks like you've made some progress from the slide deck on Abacus Wealth Advisors. A teams together and you're hiring some RIAs and have an AUM goal. Can you just talk about some of the progress you've made there?

Sure. While we have a number of opportunities in consideration that we're not able to disclose at this time, we are incredibly excited about the growth of that segment of our business. One of the things we were highlighting was that the addition of AccuQuote over time.

And AccuQuote was really one of our early steps into for those individuals that we speak to and we generate thousands of inquiries per month, could we potentially meeting the life cycle of that person and potentially sell them a new insurance product versus potentially trying to buy their policy that they may not qualify for. So that was one of the first steps into really monetizing that relationship of individuals who may not qualify to sell their policy.

And from the wealth advisory, I know we have what looks to be a pretty compelling 5-year target in our deck in relationship to our fee-related earnings diversification. And we still feel strongly about that. We have, like I said, a number of opportunities that we're considering right now. We have a great pipeline, and that's going to continue to build.

And I'm still very confident in what we've put out as a 5-year target there in relationship to earnings. I think the biggest thing for us is that we are incredibly selective in any group that we speak with, specifically around acquisition, and you have to be, right? They have to be very disciplined, and you have to make sure it's the right fit and you've got to ensure that you're looking at the type of earnings that you want because we've got a margin here, an EBITDA margin, what, 60%. And not just us, but most businesses don't have that kind of margin.

And when you look across the board, we want to be thoughtful to try to capture and not sacrifice our margin on our impact negatively any of our other portions of our business. So that's where some of the discipline falls in, and we're making sure that we're looking for the right type of advisors that would fit that.

The next question comes from Andrew Kligerman with TD Cowen.

I was struck by the 37% realized gain, which outpaced last quarter and the year-over-year quarter, which were both peaks at 26%. Could you give a little color into what drove such a large gain? And how can we think about going forward, 37% every quarter?

Andrew, come on. Thank you for asking that. That's a big number. So I think one way to think about this is that Elena touched on it during her comments. And the average days on the book of policies we had sold was a little bit longer this quarter, meaning that on average, those were around 363 days.

And when you're letting those policies mature a little bit longer, inherently, your spreads are increasing. And I think it just goes to the point that there is a lot of strategy around ensuring that you're selling your contracts and monetizing those contracts at the right time, either through new underwriting, additional underwriting, that could be relationship to premiums as well as medical underwriting.

But lastly, as these policies age and mature, they inherently become more valuable. And if you go back a year ago and you think about where rates were, right, or even more than that 1.5 years ago when we were really buying some of the -- about 1.5 years, but certainly over a year ago when we're buying these policies, we were buying these policies effectively at a lower price. And now that you've seen some movement in rates in a positive direction with lower cost of capital, you're able to sell that same contract for a larger spread. And that's very simply what occurred over this time period.

And if we go back to when we were having conversations a year ago, we've actually kind of spoken about this opportunity where we're able to buy contracts at a very favorable pricing just due to market conditions, and we were able to capitalize on that for Q3. I think that if you're looking to kind of mark where we are historically, I think it's fair to say that where we were in Q2 and Q1, as you track these, I think we're always targeting north of 20%. And in this case, we were able to capitalize on that a little bit more. But I would look for kind of where we've been historically as our norm.

That's very helpful. And then you mentioned the 363-day holding period. And I think historically, at least on the outset, you were kind of targeting more like 6 months. But then I think last quarter, you kind of thought about maybe letting it season a little longer because of precisely what you're saying. So are you thinking, Jay, about 363 days or a year rather being...

No. I mean in the chart above, you see above the average realized gains, you'll see the holding period. And now if you look at the remaining days held of owned policies, it's at 253. So for us, this was potentially more opportunistic than it has been in other quarters. And that's as good stewards of capital, that's our job is to maximize revenue and maximize returns on contracts that we think make the most sense.

I think more broadly that if we continue to utilize whether that's through funds or securitizations or as we see increased demand related from institutional investors who want to invest in this product, the holding period could actually come down just depending on from the balance sheet perspective. So I think that for our very best ideas, certainly, you might see some of those. But I think as Elena highlighted, that was less than 20% of our balance sheet, as I would say, those types of policies that were really [ let ] season, which has been in line with kind of where we've been. We haven't seen that number significantly move. And based upon these structures, you might actually see the whole period actually come down based upon the demand we have for the balance sheet contracts.

Right, so the whole period like 250-plus days or maybe even lower.

Yes.

That's helpful. I guess just lastly, Jay, AccuQuote, it's -- of course, it's life insurance, but it's different than the settlements business. Do you see any -- or maybe I missed it on the intro remarks, but are there any overlaps where AccuQuote could drive life settlements business?

And secondly, I don't know if you could share any of the economics of what the price tag was or anything like that, but I'd be interested if you could.

Sure. In relationship to synergies and crossovers, they definitely exist, right? It's a very large audience who are looking at a variety of different ways to capitalize on initially a new policy or potentially as the road continues to age, maybe selling their policy. And what we have found is that there are a number of kind of cross-selling opportunities throughout both books of business but doing it in a really thoughtful way.

And so we've also been utilizing their team for a variety of other things in relationship to follow-up and education of clients. So more to come there. But what we really like about that specific platform initially is to kind of keep it focused on what it does best, right, which is capitalizing on and selling new term style life insurance policies. And there's a number of businesses out there that from SelectQuote and others that are running advertisements on this and to be able to offer that same type of opportunity for our clients who are calling in, they don't qualify to sell their policy, we think just makes a ton of sense. So I think initially here, we're going to be able to use AccuQuote for what it's designed to do, but there are definitely synergies on a go-forward basis.

In relationship to acquisition, currently, we haven't put out the economics in relationship to the acquisition. I can tell you that from an acquisition size, meaning the scale of the acquisition, it was reasonably small in a sense that it wasn't necessarily material to both our earnings or balance sheet. So this was not -- it wasn't large enough that we needed to report on it, if that makes sense.

The next question comes from Timothy D'Agostino with B. Riley.

Regardless of securitization coming in at $50 million, as an investor demand increases, could we see larger securitizations going forward, maybe upwards of like $75 million? Or would we just see more securitizations at $50 million?

Thanks, Timothy. Yes, the answer is you will see larger securitizations over time. I think as we highlighted before, the initial securitization was to ensure that the platform was effective, was efficient, that there was demand. There is excess demand for that current product. And so I would expect larger securitizations and more frequent ones.

Okay. Great. And then if I could ask a second question. On Slide 27 of the earnings deck, looking at the number of lives track for ABL, it seems like a lot went from in trial to paid lives. I was just kind of wondering how quickly those turn from in trial to paid? And then kind of what's the growth looking like going forward? Because obviously, that number in trial has now decreased as they've been turned on.

Great question. Thank you, Timothy. Yes, that can turn pretty quickly. I mean, typically, you'll see that turn within the quarter. So somebody will stay in trial for 30 to 60 days. And then as that happens, you'll turn over renew. And the actual underlying pipeline for number of lives that we actually have is pretty significant. I mean, we're on track for north of 3 million lives by end of Q4. So just because they're not in trial, it also means that they could just be in the pipeline, and they don't need a trial. right? We just wanted to show what's beyond, I think, impressive to me when you're looking at that chart is look at where that business was a year ago. I mean you're talking about nearly a 20x, 30x multiple over where they were in relationship to the number of lives.

So the business is growing exponentially. It's growing very quickly. The demand is off the charts. And these are, again, 3- and 5-year long-term SaaS-related contracts, and there were some of the largest pension funds in the country. And that I don't want to underscore this, but that gives us opportunity for financial products to represent into those same institutions, where now as an approved provider, we can show them additional opportunities to work with Abacus. And so even from a lead gen point of view at the very top level, it's been incredibly valuable.

This concludes our question-and-answer session. I would like to turn the conference back over to Jay Jackson for any closing remarks.

Thank you so much, everyone. Our business is built around the people. And every single person who works here at Abacus, every employee, keep in mind that nearly 80% of our employees own this stock alongside with you. And there's no greater moment than when we're able to deliver these kind of results, but we're able to deliver them because each and every person treats this business like an owner. And because of that, I think that's why we have the results that we have. And we look forward to talking to you in future calls. If you want to reach out to us, please don't hesitate to reach out to our Investor Relations team. One of the things we pride ourselves on is our accessibility and we look forward to speaking to you again soon.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.