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BRO_GWG_CorporateBrochure
- 2. Developing>> Sharing >> Opportunity >> Inno vating>>Planning >>G ro w ing>> CIRCLE OFWEALTH EVERYTHING IN LIFE HAS A CYCLE – INCLUDING THE CIRCLE OF WEALTH. WE BELIEVE CAREFUL PLANNING HELPS ACHIEVE GOALS. HOWEVER, RETHINKING THE FUTURE BRINGS OPPORTUNITIES THAT WERE NOT PREVIOUSLY CONSIDERED. THIS PHILOSOPHY GIVES INSIGHT INTO A COMPANY WITH FULL-CIRCLE BENEFITS.
- 3. GWG Holdings, Inc.(“GWG”) is founded on the belief that there is a better way to participate in the secondary market for life insurance. This emerging asset class offers non-correlated opportunities for investors while providing alternative financial solutions for seniors. My extensive professional experience provides me with guiding principles of how GWG is organized and operated — with integrity, transparency and responsibility. I have launched companies in the financial industry, consulted for major corporations, and managed a wide range of financial and investment initiatives. This experience has led me to one conclusion: GWG is simply the most unique and captivating business with which I have been involved. My goal for GWG is that it delivers financial benefits for all its constituents. We are working towards long-term profitability and growth through careful planning, disciplined investment decisions and highly proficient management. I am excited to be part of GWG and proud of my team, which is committed to these guiding principles every day. E S S A G E F R O M O U R E X E C U T I V E C H A I R M A N PAUL SIEGERT Executive Chairman GWG Holdings, Inc.
- 4. A VISION TOESTABLISH GWG AS THE INDUSTRY LEADER, TRUSTED PARTNER AND PROVIDER OF TRANSPARENT FINANCIAL SOLUTIONS. H E G W G C O M M I T M E N T A MISSION TO EMPOWER POLICY OWNERS, INVESTORS, SHAREHOLDERS AND EMPLOYEES TO FINANCIALLY PROSPER THROUGH THE SECONDARY MARKET FOR LIFE INSURANCE.
- 5. U R BU S I N E S S A P P R O A C H CORE VALUES Our core values of integrity, transparency, and responsibility guide us in our mission to help our customers prosper financially through the secondary market for life insurance. We consistently strive to distinguish GWG as the trusted industry leader and provider of transparent solutions by how we conduct our business. INTEGRITY is a multi-faceted value at the center of our business model. For GWG, integrity means our services are provided with due diligence and disclosures, financial partners are informed with useful information, and management creates goodwill with everyone involved. TRANSPARENCY is essential to operating honestly and openly in all aspects of our business. In accordance with the Securities Acts of 1933 and 1934, all parties interacting with GWG have access to meaningful facts, assumptions, risks and circumstances that impact our business. RESPONSIBILITY is at the core of every decision we make. We are aware that our actions affect people every day and are accountable for offering solutions to help our customers meet their strategic goals. We are committed to doing the right thing in all circumstances to build a better future for everyone we serve.
- 6. GWG, through its subsidiaries,begins growing new portfolio of life insurance policies with support of its private offering of secured notes and DZ Bank credit facility. 2009 U R S T O R Y Executive Chairman Paul Siegert conceptualizes business model to participate in the secondary market for life insurance. GWG Life, LLC begins joint-venture discussions with European money center bank, WestLB. GWG, through its subsidiary, GWG DLP Funding, LLC secures $250M credit facility from WestLB. GWG successfully completes its first year of policy purchases. Since starting, GWG, through its subsidiaries, has reviewed over 38,000 life insurance policies and acquired $1.72B in life insurance benefits. GWG, through its subsidiary, GWG DLP Funding II, LLC secures new $100M credit facility with European money center bank, DZ Bank. Global credit crisis occurs. 2004 2005 2006 2007 2008 GWG is headquartered on the 12th floor of the U.S. Bank Plaza located in downtown Minneapolis, MN Executive Chairman Paul Siegert conceptualized GWG Life when the secondary market was quietly growing for seniors who wanted choices with their life insurance policies. Life insurance has actuarial value and can be repurposed to provide financial options for policyholders. It is this insight that launched GWG and is the foundation of the company today. In 2006, GWG received its initial backing and began offering services based in the secondary market for life insurance. Today, GWG continues to provide financial solutions to policyholders and is dedicated to raising awareness of the secondary market to seniors.
- 7. GWG sells thelife insurance policies owned by GWG DLP Funding, LLC, and secured by $250M credit facility with West LB. GWG files S-1 Registration Statement with SEC to become a publicly reporting company. GWG raises $24M in its private offering of Preferred Series A stock. 2010 2011 2012 2013 2014 2015 GRIGSBY v. RUSSELL, 222 U.S. 149 (1911) In 1911, the U.S. Supreme Court ruled that life insurance policies are personal property that consumers have a right to sell to third parties not having an insurable interest in the insured. As of September 2015, all but five states* have laws that in some manner regulate the sale of life insurance policies in the secondary market. GWG supports these laws because of the enhancement provided to consumers and investors. *Alabama, Missouri, South Carolina, South Dakota, and Wyoming WHAT IS THE SECONDARY MARKET FOR LIFE INSURANCE? A life insurance policy is sold into the secondary market when the owner of a policy sells it to a purchaser for an amount that exceeds the cash surrender value, but is less than the expected death benefit. In states that regulate the secondary market for life insurance, all parties involved in the transaction must be licensed, registered, and comply with specific provisions of the law. H I S T O R I C D E C I S I O N C O M E S F U L L C I R C L E SEC declares GWG’s S-1 Registration Statement effective. GWG Life continues to build its portfolio of life insurance policies while raising awareness of the secondary market for consumers. GWG Holdings, Inc. files for Initial Public Offering (IPO) and lists common stock on the NASDAQ Exchange. GWG Holdings, Inc. continues offering publicly registered debt products to retail investors with L Bonds.
- 8. N N OVAT I N G L I F E I N S U R A N C E WHAT WE DO GWG, through its subsidiaries, acquires life insurance in the secondary market from consumers who no longer want or need their policies. HOW WE DO IT Our strategy is to own the policies we purchase until their maturity. We strive to expand and manage our access to capital in order to build and sustain this growing portfolio to generate profitable gains. RISKS INVOLVING OUR INDUSTRY The secondary market for life insurance policies is new and relatively unproven. GWG’s investments in these markets may present greater risks than other more established markets. In addition, changes to the mortality assumptions, regulatory shifts, and development of the secondary market for life insurance policies may have an adverse effect on GWG and its investments. AXA Equitable LIFE INSURANCE COMPANY MassMutual LIFE INSURANCE COMPANY John Hancock LIFE INSURANCE COMPANY
- 9. American General LIFE INSURANCECOMPANY TransAmerica LIFE INSURANCE COMPANY Lincoln National LIFE INSURANCE COMPANY Voya LIFE INSURANCE COMPANY Building depictions are for illustrative purposes only, and represent GWG’s ownership of life insurance policies from these life insurance carriers. OUR LARGEST INVESTMENTS in life insurance policies are issued by the following investment grade rated insurance companies: INSURANCE S&P INSURANCE S&P COMPANY RATING* COMPANY RATING* AXA Equitable A+ MassMutual AA+ John Hancock (USA) AA- American General A+ Lincoln National AA- Metropolitan Life AA- Transamerica AA- West Coast Life AA- Voya A Pacific Life A+ * Largest holdings and credit ratings of insurance companies issued by Standard & Poor’s are as of 6/30/15. Standard and Poor’s Ratings (S&P Rating) indicate credit worthiness of an insurance carrier, typically ranging from AAA to D (AAA being the highest and D being the lowest). Innovation is the specific instrument of entrepreneurship ... the act that endows resources with a new capacity to create wealth. — Peter Drucker
- 10. THREE ESSENTIAL FACTORScome together to create opportunities in the secondary market for life insurance: MARKETPLACE As of December 31, 2013, over $11.4 trillion dollars of life insurance benefits are owned by individuals who may believe their only options are: • continuing to pay premiums to guarantee the benefit • allowing the policy to lapse for no value • receiving the surrender value from the insurance company However, it is important to know that consumers have the right to sell their life insurance policies for the fair market value. This option makes owning life insurance more valuable than ever. FACT > > $11.4 TRILLION* FACE VALUE OF INDIVIDUAL INSURANCE BENEFITS OWNED BY CONSUMERS, as of December 31, 2013 FACT > > 5.7% ANNUAL* LAPSE RATE AND SURRENDER RATE OF INDIVIDUALLY OWNED LIFE INSURANCE POLICIES, 2013 FACT > > $639.3 BILLION* INSURANCE BENEFITS LAPSED AND SURRENDERED, 2013 1) W E L L - R O U N D E D S T R AT E G Y * American Council of Life Insurers Fact Book 2014(ACLI)
- 11. ACTUARIAL SCIENCE The disciplinethat applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuarial life expectancy is mathematically predictable, and the methods used when analyzing mortality in the United States have steadily improved. We apply actuarial science to value life insurance policies available in the secondary market, and use this information to purchase policies that seek to strengthen our portfolio. EARLY BOOMERS MALE FEMALE 1981 POPULATION PYRAMID FOR THE UNITED STATES Percent of Population AGE 85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 2) 3) ac•tu• ar• i• al MALE FEMALE 2013 POPULATION PYRAMID FOR THE UNITED STATES Percent of Population AGE 85+ 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 EARLY BOOMERS 53 57 61 66 71 73 75 78 79 79 80 81 82 50 56 58 62 65 67 67 70 72 74 75 76 77 90 80 70 60 50 40 30 20 10 0 1911 LifeExpectancyinYears Birth Year U.S. LIFE EXPECTANCY AT BIRTH Female Male 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2012 2013 Source: U.S. Census Bureau Source: U.S. Census Bureau, 2012 Population Estimates and 2012 National Projections DEMOGRAPHIC TRENDS According to the U.S. Census Bureau, in 2010 the leading edge of baby boomers turned 65, indicating a major growth in the senior population for the years ahead. Given the size of the boomer generation, the U.S. Census Bureau states, “Future growth of the older population is both highly probable and unprecedented in the United States.”
- 12. TAKING CARE OFFAMILY & PROTECTING ASSETS These are the reasons life insurance is purchased. Other considerations may include: • Peace of mind • Tax advantages • Vehicles for cash savings • Income replacement or inheritance • Personal responsibility But over the years, life insurance policies should be re-evaluated to determine if they still fulfill the needs for which they were originally purchased. GWG PROVIDES OPTIONS Rates increase. Circumstances change. Policy owners can no longer afford premium payments, or they simply don’t need life insurance anymore. After years of paying insurance premiums, choosing to surrender or letting policies lapse can result in great losses for policy owners. As an alternative, consumers can sell their life insurance policies for the fair market value. These transactions help owners reclaim their premiums paid, and offer a unique opportunity to realize value through the secondary market. For consumers, knowledge opens the door to powerful choices. Wealth is the ability to fully experience life. – Henry David Thoreau M P O W E R I N G P E O P L E
- 13. VALUE TO THEOWNER Many factors determine the value of a policy in the secondary market, including but not limited to, life expectancy, health of the insured, premium costs, broker costs and commissions. The example below illustrates a policy’s value in the secondary market and the value an owner may receive above and beyond the cash surrender value. A person over 70 years old owns a universal life insurance policy and has a life expectancy of eight years. He originally purchased the policy to protect his family, but circumstances have changed and he no longer needs the life insurance. If he surrenders the policy, he would only receive the cash surrender value. Instead, he can sell it in the secondary market which, in most cases, may yield a value higher than the cash surrender value. He can now use the proceeds to supplement his retirement income, invest in his grandchildren’s education, or take a special vacation. Since 2006, GWG has reviewed 38,000 policies and purchased $1.7 billion in policy benefits. When policy sellers were asked what they planned to do with the money received from GWG for their policies, here is what they said: “I’m going to pay some debt, give to charity, and re-invest.” – John D. “…to increase my savings and travel to see the grandkids.” – Mary L. Since 2006, GWG has paid over $291M to seniors for their life insurance policy benefits. A K I N G A D I F F E R E N C E
- 14. H E GW G E X E C U T I V E T E A M COMMITTED TO INTEGRITY, TRANSPARENCY AND RESPONSIBILITY GWG believes in a responsible, environmental ethic and is proud and committed to using Forest Stewardship Council™ (FSC®) certified papers for its marketing materials. PAUL SIEGERT Executive Chairman JON SABES Chief Executive Officer MICHAEL FREEDMAN President STEVE SABES Executive Vice President Originations and Servicing BILL ACHESON Chief Financial Officer JON GANGELHOFF Chief Operating Officer CHRIS MADDOX Chief Marketing Officer MARK PETERSEN Head of Capital Markets
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- 16. GWG HOLDINGS, INC.| 220 South Sixth Street | Suite 1200 | Minneapolis MN 55402 | 877.494.2388 | gwglife.com Securities offered on a best efforts basis on behalf of GWG Holdings, Inc., by Emerson Equity, LLC, Member FINRA/ SIPC, managing dealer for the Issuer. GWG Holdings, Inc., and Emerson Equity, are unaffiliated entities. INVESTING IN LIFE