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Dallas-based Beneficient going public via SPAC in deal valuing it at $3.5 billion

The company works in the fast-growing $12 trillion alternative assets market.

Another Dallas-based financial services company is going public in a deal that will value it at a whopping $3.5 billion.

Beneficient Company Group, founded in 2003, plans to begin trading on Nasdaq through a merger with Avalon Acquisition Inc., a blank check company based in San Francisco. Avalon closed its $207 million initial public offering last October and has been searching for a financial services company to take public through what is called a SPAC deal.

Beneficient targets the nearly $12 trillion alternative asset market. It works with mid- to high-net-worth investors and small- to medium-sized institutions, which Beneficient estimates is about a $2 trillion market. Since 2017, Beneficient has delivered liquidity on about $1 billion of alternative assets.

“It became abundantly clear to me that there were firms popping up every day focused on getting smaller institutions and individuals into alternative assets in a so-called effort to ‘democratize’ the alternative asset industry, but very few or perhaps none focused on getting them out while delivering transparent data on the investments,” CEO Brad Heppner said in an investor presentation.

Heppner said his goal is to reinvent “a large, growing industry built for big institutions into a new industry for addressing a newly emerging market comprised of individuals and small institutions.

“The vision for Beneficent grew in my mind over 30 years in the industry, during which I founded and led 10 successful alternative asset operating companies,” he said.

The merger will provide Beneficient with about $200 million in gross proceeds to help grow its business. The combination with Avalon is expected to be completed in the first half of next year.

According to the presentation, Avalon believes Beneficient has a competitive advantage as the industry’s first regulated trust company that acts as principal and fiduciary to provide alternative asset liquidity.

In July 2021, Beneficient announced that it received a charter from the Kansas Office of the State Bank Commissioner to operate as a regulated fiduciary that provides liquidity, custodial and administrative services.

Beneficient reported revenue of $72 million for 2020 and $77 million for 2021.

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