Beneficient · NASDAQ:BENF
Beneficient — The Beneficient Company Group — SPAC Merger (January 2023)
46 slides from Beneficient's SPAC merger presentation, Jan 10, 2023
Slide 1: Analyst Day Presentation
Analyst Day Presentation January 10, 2023 Nasdaq MarketSite
Slide 2: This presentation is for educational and informational purposes only
This presentation is for educational and informational purposes only This presentation has been prepared for use by The Beneficient Company Group, L.P. (“Ben”) and Avalon Acquisition Inc. (“Avalon”) in connection with their proposed business combination. On September 21, 2022, Ben, Avalon, Beneficie
Slide 3: Presenters
Don Putnam Brad K. Heppner James G. Silk Derek L. Fletcher Executive Chairman Chief Executive Officer Executive Vice President & President & & Chairman Chief Legal Officer Chief Fiduciary Officer Dr. Sam Hikspoors Scott Wilson Gregory W. Ezell Jeff Welday Maria S. Rutledge Chief Risk Officer Chief U
Slide 4: Agenda
Time Topic Speakers Welcome and • Don Putnam, Executive Chairman, Avalon Acquisition Inc. 10:00 AM Introduction to Ben • Brad K. Heppner, Chief Executive Officer & Chairman, Beneficient + Q&A Customer, Distribution, • Jeff Welday, Global Head of Originations & Distribution Growth Opportunities • Der
Slide 5: Introduction to Beneficient
Introduction to Beneficient
Slide 6: Financial Services with Strong Competitive Position & Growing Platform
Don Putnam Financial Services with Financial Results Strong Competitive Position & Growing Platform ✓ Technology-driven, innovative business strategy, and ✓ Sectors in which we could leverage our expertise, including differentiated products that create a competitive advantage asset management, finan
Slide 7: Significant Market Opportunity, Strong Team, Innovative Business Model
Don Putnam 1 • $11.9 trillion alternative assets held by investors globally 2 • Ben estimates its current target market holds approximately $2 trillion in alternative assets and has annual Significant Market 3 liquidity needs of approximately $50+ billion Opportunity − Ben's target market is focused
Slide 8: 8
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Slide 9: The Journey of Transforming an Asset Class
Brad Heppner The Journey of Transforming an Asset Class The alternative asset class is at the precipice of being digitized and democratized as other asset classes have been before (e.g., equities, mortgages, etc.) 2 3 1 Standardization of assets through Technology-Driven a safe and sound process Str
Slide 10: Liquidity solutions for underserved investor segments
Brad Heppner Ben provides liquidity solutions for underserved investor segments, who hold illiquid, professionally managed alternative investments Global alternative Mid-to-ultra high Increasing demand Current in-market Liquidity solutions and assets under net worth and for early liquidity – options
Slide 11: Ben's ecosystem seeks to digitize and democratize the alternative asset class
Ben’s ecosystem seeks to digitize and democratize the alternative asset class Overview of Ben’s Integrated, Data-Rich Ecosystem “Digitizing” assets on the platform decreases friction costs of TM AltCustody TM AltLiquidity TM1 AltQuote transferring assets to & TM2 AltData ExAlt Trusts Future Products
Slide 12: Traditional alternative managers get investors into alternatives – Ben gets them out
Brad Heppner Traditional alternative managers get investors into alternatives – Ben gets them out Comprehensive & Transparent Quick Quote on Global alternative High growth, FinTech …while Ben’s liquidity Digitized Data, Alternative Solution assets under disruptors have solutions are 2 Reporting & As
Slide 13: Growth in alternative investments has increased demand for early liquidity
Brad Heppner Recent period of rapid growth in alternative investments has resulted in increased demand for early liquidity, currently most are provided through the secondaries market, which caters to large institutions AUM ($B) Secondary ($B) Top 3 Secondary Fund 12,000 160 Market Share Since 2015 T
Slide 14: Illustrative revenue funnel
Brad Heppner Ben’s revenue capture is illustrative and intended to contextualize the key components of monetization Secular Trends Additive Illustrative Revenue Funnel to Ben’s Model A Total Global Alternative Assets Held A B✓ Amount Held by Ben’s Current Target B C ✓ Market Annual Liquidity Demand
Slide 15: A unique platform fortified by a strong underlying structure
Brad Heppner A unique platform fortified by a strong underlying structure ✓ Patents pending on the systems and methodologies built into Statutory Anticipated Public AltAccess that drive liquidity transactions Listing Technology Regulatory ✓ Ben’s technology facilitates underwriting financings, manag
Slide 16: Management team
Brad Heppner Brad K. Heppner DIRECTOR, CEO AND CHAIRMAN OF THE BOARD 30+ years industry experience in finance and the alternative asset space Derek L. Fletcher James G. Silk PRESIDENT & CHIEF FIDUCIARY OFFICER WEALTH STRATEGIES DIRECTOR EXECUTIVE VICE PRESIDENT & CHIEF LEGAL OFFICER 25+ years indust
Slide 17: Board of directors
Brad Heppner Brad K. Heppner DIRECTOR, CEO AND CHAIRMAN OF THE BOARD 30+ years alternative asset and financial institutions experience, Chairman of the Board and CEO, Prior: Founder and CEO of The Crossroads Group; Founder of Capital Analytics; previously with Bain & Company, MacArthur Foundation an
Slide 18: Customer, Distribution, Growth Opportunities
Customer, Distribution, Growth Opportunities
Slide 19: Digital liquidity for most alternative assets
Jeff Provides a modernized digital method of delivering liquidity to investors in most alternative assets, including: Other Professionally Private Venture Leveraged Structured Managed Infrastructure Equity Capital Buyouts Credit Alternative Eligible Asset Investments Types Real Assets Private Privat
Slide 20: Focus on MHNW investors and small-to-medium sized institutions
Jeff Focus on U.S. Medium-to-High Net Worth (MHNW) investors and Small-to-Medium Sized Institutions (SMTI) who represent a growing, but traditionally underserved liquidity market High Growth Asset Allocation Fast Growing Increased Asset Class Tailwinds Wealth Segment Demand for Increased preference
Slide 21: Survey of alternative asset investors shows interest in liquidity
Jeff A comprehensive survey commissioned by Ben of 600 alternative asset investors shows high interest in alternatives, along with the need for liquidity 100% of respondents are interested in a simple, rapid and 81% of MHNW investors prefer to work with/through their cost-effective approach to getti
Slide 22: Omnichannel approach to capture market share
Omnichannel approach designed to capitalize on early mover advantages and capture meaningful market share Source of Distribution Demand Channel Why It’s Important Ben Approach Results to Date • Strategic, enterprise engagements, delivering Ben’s liquidity ✓ Highly scalable platform as a turnkey, pri
Slide 23: Ben serves as a regulated fiduciary
Ben serves as a regulated fiduciary in providing liquidity, custodial and administrative services to alternative asset investors & managers Ben’s Services Provide a Model of Efficiency • Strong standard of• Holds similar fiduciary• Duty of loyalty,• Regular examination by integrity, trust & powers t
Slide 24: Ben AltAccess customer experience
Platform allows the secure digital delivery of documents and seeks a rapid approach to providing liquidity completed entirely through Ben AltAccess™ Overview of Ben’s Differentiated Customer Experience Customer Action: Customer requests liquidity through a digital platform 01 Action: Ben conducts un
Slide 25: Faster liquidity timelines with Ben AltAccess
Dere Faster liquidity timelines are made possible by Ben AltAccess™, a digital secure AT&T NetBond® certified tech platform designed to deliver liquidity and related custody and trust services to owners of alternative assets Traditional Liquidity Providers Non-Disclosure Agreement Instead of negotia
Slide 26: Review of Ben's Integrated Platform
Review of Ben’s Integrated Platform
Slide 27: Maria
Maria 27
Slide 28: End-to-end digital platform
TM Ben is developing an end-to-end digital platform Groundbreaking AltAccess digital structured to ultimately create flywheel effect liquidity platform designed to drive Groundbreaking AltAccess® digital liquidity platform designed to drive complementary lines of business across ecosystem complement
Slide 29: Proprietary technology infrastructure
Deal Flow: Deal Flow: Customer BIDS BAS / Loan Equity AltAccess Admin (Ben Investment Navigation System Salesforce Data System) (LENS) ✓ Self-service user✓ One-stop shop manages✓ Underwriting✓ Integrations between experience all customer information transactions at BIDS and BAS (Ben asset/investment
Slide 30: Cybersecurity and IT risk evaluations
Evaluations Ben Performs Gramm-Leach-Bliley Act (GLBA) Information IT Risk Assessment as part of the Enterprise Risk Management Program Security Program established Internal Controls (IA) Risk Assessments of IT General Controls FFIEC CAT self-assessments resulted in appropriate cybersecurity maturit
Slide 31: Risk Management Overview
Risk Management Overview
Slide 32: Total Collateral Management framework
Proficient fiduciary loan collateral risk management help anchor Ben’s originations and underwriting processes Ben’s Total Collateral Management (TCM) framework provides coherent risk management and monitoring of Optimally Macroeconomic ExAlt loan collateral inventory, market exposures and Priced Li
Slide 33: OptimumAlt collateral allocation algorithm
• Driven by Ben’s patent-pending OptimumAlt™ proprietary mean-variance algorithm • System seeks to deliver optimal risk-adjusted collateral allocation across alternative assets, helping create a diversified aggregate inventory across asset classes, regions and sectors Asset Class Geography Sector %,
Slide 34: Ben Analytics System pricing process
Combines modern quantitative strategies with sophisticated fundamental analysis to analyze loan collateral, helping Ben provide fast and well-priced liquidity Collateral Assets Data & Characteristics (Underwriting) • Asset risk forecasting • Asset growth forecasting • Ben inventory compatibility Top
Slide 35: Underwriting Deep Dive
Underwriting Deep Di eee e eee cece eee een erences ewecessessesesssssssssees
Slide 36: Quantitative and fundamental collateral underwriting
Combines modern quantitative investment techniques with sophisticated fundamental analysis for loan collateral underwriting Projected Collateral Net Cash Flows Over Time • Led by Risk Department • Multifactor model by asset class Technical • Decomposes returns into market components (beta) Top-Down
Slide 37: Data captured on alternative asset ecosystem
Ben captures a vast quantity of data related to various components of the alternative asset ecosystem • Collection and organization of data provides opportunity for increasingly efficient underwriting and risk mitigation Alternative Asset Investments Customer Ownership Other Organizational Documents
Slide 38: Fundamental diligence areas
Examines multiple fundamental diligence areas through proprietary systems that leverage Ben’s extensive collection of fund and portfolio company data and leading third-party platforms Alternative Assets Manager & Fund Diligence Alternative Asset Investment Level Diligence Business model and competit
Slide 39: Fiduciary loan portfolio by balance
Based on aggregate Fiduciary Loan Balance 2 3 4 1 Geography Investment Strategy Status Industry Sector Net Other Assets, Earnouts, Escrows Private Africa Natural Real Estate Materials Other Europe Public Resources N/A (e.g., Escrow, 0% South 2% 10% Venture Capital - Earnouts) 5% 13% America 16% 2% E
Slide 40: Fiduciary loan collateral by net asset value
Based on the aggregate Fiduciary Loan Collateral Net Asset Value 3 2 4 1 Investment Strategy Geography Status Industry Sector Household & Pharm., Biotech Pers. Prod. Private Net Other Assets, & Life Sci. Retailing Real Estate Earnouts, Escrows Real Estate Africa Other Other Public Natural Europe Com
Slide 41: Financial Highlights
Financial Highlights eee e eee cece eee een erences ewecessessesesssssssssees
Slide 42: Transaction-related fees embedded in advance rate
All transaction-related fees embedded into the determination of the advance rate, allowing customer to avoid out-of-pocket payment of fees Revenue Certain Services / Costs Covered Expected Rates Rate Basis Recognition • Access and use of AltAccess Platform that provides the end-to-end delivery of Be
Slide 43: Business segment revenues illustrate impact of liquidity transactions
Business segment revenues, not the ExAlt Trusts or consolidating eliminations, illustrate the impact of liquidity transactions Ben Ben Customer Corporate & Consolidating Consolidated Liquidity Custody ExAlt Trusts Other Eliminations Change in unrealized value A in NAV from remaining asset collateral
Slide 44: Annualized revenue rate as a percentage of ExAlt loan balance
Interest and fee revenue converted from applicable basis (typically based on collateral NAV or ExAlt loan balance) and 1 accounting for revenue recognition timing into an annualized revenue rate as a % of original ExAlt loan balance 17.0% 10.5% 16.0% 1.1% -1.4% -1.0% 1.0% 14.3% -0.3% -1.1% -1.5% -0.
Slide 45: Transaction summary
• The Beneficient Company Group, L.P. (“Ben”) Transaction Parties • Avalon Acquisition Inc. (“AVAC”) • AVAC has $207mm in trust • 100% existing Ben equity holders rollover Transaction Summary • Prior Ben AltAccess customer consideration converted into public shares • Ben expected to apply for listin
Slide 46: Conclusion and Q&A
Conclusion and Q&A
The Beneficient Company Group — SPAC Merger (January 2023) on 6ix