Beneficient at Emerging Growth Conference 81: Strategic Moves and Prospects

On Thursday, 17 April 2025, Beneficient (NASDAQ:BENF) participated in the Emerging Growth Conference 81, where CEO Brad Heppner outlined the company’s strategic vision. The conference highlighted Beneficient’s innovative business model, focusing on providing liquidity solutions in the alternative asset market, while also revealing challenges such as the complexities of market dynamics.

Key Takeaways

• Beneficient reported positive net income for the nine months ending December 31, 2024.
• The company plans to acquire Mercantile Bank to expand its financial services.
• There is a significant unmet demand for liquidity, estimated at over $210 billion annually.
• Beneficient is leveraging technology to enhance its service offerings.
• The company is optimistic about its prospects for 2025, driven by new market opportunities.

Financial Results

• Beneficient achieved positive net income for the nine months ending December 31, 2024.
• The company’s investments, valued at $334 million, serve as collateral for a net loan portfolio of $261 million.
• Revenue generation includes interest and service-based fees from trust operations.

Operational Updates

• Beneficient announced the acquisition of Mercantile Bank, a Puerto Rico-based international financial entity, subject to closing conditions.
• This acquisition is expected to provide expanded custody, clearing, and control account fee-based services.
• The acquisition aims to generate additional cash flow and enhance offerings for international and digital asset investors.

Technology and Platform Development

• Beneficient’s Alta Access platform serves as a central hub, allowing customers to select products and complete transactions online.
• The platform enables rapid deal pricing and closure, often within thirty days.
• Alta Access positions Beneficient as a technology-enabled financial services provider.

Future Outlook

• There is an annual unmet demand for liquidity exceeding $60 billion for smaller investors and $150 billion for general partners.
• Beneficient is preparing for the emergence of digital alternative asset markets.
• The company anticipates new international opportunities, including alternative asset custody services.

Beneficient’s comprehensive strategy, highlighted during the Emerging Growth Conference 81, underscores its commitment to addressing liquidity challenges and expanding its market presence. For further details, please refer to the full transcript below.

Full transcript - Emerging Growth Conference 81:

Anna Berry, Host, Emerging Growth Conference: Under the symbol b e n f. It’s on a mission to democratize the global alternative asset investment market by providing traditionally underserved investors and general partners seeking exit options, anchor commitments, and value added services for their funds with solutions that could help them unlock the value in their alternative assets. To welcome back Brad Heppner, CEO. Nice to see you Brad. Thank you.

Brad Heppner, CEO, Beneficient: Thank you.

Anna Berry, Host, Emerging Growth Conference: Alright. So those of us who might be new to the story, could you give a quick overview of business and why Ben is unique in your industry?

Brad Heppner, CEO, Beneficient: Sure thing, Anna. Thanks for having us at the conference today. Beneficient or just BEN for short is a unique business model. We’re designed to solve a large market problem for both liquidity and new primary financing in the private asset market. Simply put, we provide fiduciary products and services that deliver liquidity and primary capital for holders and managers of all types of alternative assets.

Now while these solutions exist for very large investors, the traditional process is incredibly complex, it’s expensive, and very time consuming for smaller investors. That’s why we use efficient technology enabled solutions designed for high net worth individuals and small to mid sized institutions that have been underserved when it comes to exiting alternative assets prior to their maturity. As this chart demonstrates, we believe this market includes an unmet demand for liquidity of over $60,000,000,000 annually for smaller investors and smaller institutions, plus another hundred and $50,000,000,000 plus annually in general partners seeking liquidity for the limited partners through restructurings and in the secondary markets.

Anna Berry, Host, Emerging Growth Conference: That’s a unique market. Can you share how the company has performed this year?

Brad Heppner, CEO, Beneficient: Sure thing. For the nine months of our fiscal year ended 12/31/2024, BENNIS generated positive net income. We’re on a March 31 fiscal year end. As disclosed in our public filings, we recently announced new primary capital transactions with customers using our solutions. That’s very exciting for us because it’s how we grow and diversify the underlying collateral portfolios that we service generating both interest and fees for service revenues.

We believe these transactions are addressing the demand for primary capital in new alternative assets. As this chart shows, PEI data has indicated that it is taking an average of eighteen months for GPs to raise their private equity funds. That’s double what it took them just three years ago. We expect to continue to evaluate additional platform developments to accelerate our capabilities for delivering both this primary capital solution and liquidity and prepare for the future emergence of digital alternative asset markets.

Anna Berry, Host, Emerging Growth Conference: You recently announced the acquisition of an international banking entity, so give us the background on that please.

Brad Heppner, CEO, Beneficient: Absolutely. In December 2024, we announced that Ben entered into an agreement to acquire Mercantile Bank. It’s subject to certain closing conditions that we’re working on. Mercantile is a Puerto Rico based international financial entity or IFE. It’s licensed and regulated by the office of the commissioner of financial institutions of Puerto Rico.

An IFE’s authorized activities can include custody clearing and payments and related traditional and digital products and services. IFE’s can also be approved to offer traditional banking services such as correspondent deposits, lending, investments, and trusts. Puerto Rico is a leading jurisdiction working in conjunction with regulators to provide expanded authorization for IFE banks to engage in activities such as asset management, clearing, and digital assets. We believe that Mercantile acquisition can enable us to offer an expanded range of companion custody, clearing, and control account fee based services that complement our existing businesses but on a broader scale. Additionally, we expect the acquisition to have the potential to generate additional complementary cash flow in the near term.

And longer term, we want to deliver additional custody services for international investors and digital asset investors that generally have and generate a higher fee rate structure, potentially higher margins than our traditional custody services. So we also believe the proposed acquisition of an IFE has the potential to broaden our current offerings in ways that may open new international opportunities such as alternative asset custody services that assist the holders of foreign investments in gaining access to the capital markets of international jurisdictions. This may yield higher fee assessments than more traditional custody offerings.

Anna Berry, Host, Emerging Growth Conference: And we talked a lot about private equity investments, so can you give us a little information about the private investments connected to BEN?

Brad Heppner, CEO, Beneficient: Of course. The world of private investments is some of the most exciting and innovative companies in the whole world. As of 12/31/2024 we reported investments with a fair value of 334,000,000 which serve as collateral for Bend Liquidity’s net loan portfolio of 261,000,000. The diversification of these assets are on this current chart. We use a regulated trust structure to hold the collateral assets on this chart and every that that structures for everything related to the financings we do.

Our financial model involves the receipt of interest and service based fee revenue from these trusts. This is unique for most other publicly traded private equity managers because in those companies are really just participating in the management fees without exposure to the assets. We haven’t been has exposure to the assets. Our portfolios are made up of a highly diversified mix of assets with a global reach that crosses many different industries as you can see on this chart. For those in asset management, we use the endowment model of portfolio diversification, which is similar to the widely known and well regarded investment model at Ivy League Endowments.

We also believe that by pursuing this diversified model, we can generate appropriate risk adjusted rates of return over time. This is why we report our financial results in separate big business segments in our in our reports. Then liquidity, which generates interest revenue for financing liquidity off the balance sheet, and then custody, which produces fee revenue for the use of the platform trust and custody services. It’s an exciting business to us and we believe many of these companies and future innovators are industry leaders.

Anna Berry, Host, Emerging Growth Conference: Wonderful and you also mentioned technology a couple times in our conversation so how does BEN use technology to deliver your services to customers?

Brad Heppner, CEO, Beneficient: Okay. Well, in this last chart, you can see our technology platform. This is actually a very key part of our business. BEN was historically designed to be a fully technology enabled financial services business. I mentioned earlier that smaller investors struggle to find liquidity, and if they are even able to find it, the costs are often very prohibitive.

Very large investors have the benefit of scale and quite often internal solutions to generate liquidity, But the increasingly prevalent smaller investor base just doesn’t typically have those same advantages. So to try to solve that issue, we built Alta Access. That’s our fintech platform, which serves as the centralizing hub of our business, and it is an interactive, secure, end to end portal through which our customers select among our products and services and then complete their transactions in a regulated environment all online. As I mentioned, we expect that the Mercantile acquisition will allow us to offer additional alternative asset custody services through AltAccess that include, among other potential items, a companion line of business focused on issuing depositary receipts to assist holders, foreign investments, to gain access to the capital markets of additional international jurisdictions for them. A holder of a private asset can input all of their data, and the system will generate a market based price for them.

Then we can also use standardized transaction documents to close a transaction. In short, we can price and close a deal in as little as thirty days if the counterparty wants to do so, whereas traditional models usually take months or even longer. We’re starting to see more transaction activity in the market, we are very excited about the potential that this 2025, holds here for Beneficient.

Anna Berry, Host, Emerging Growth Conference: Wonderful. Well, thank you so much for this update. Really thorough update here and for anyone who has more questions, they’re submitting to us and we will submit them. But a great way to end our conference today. We appreciate you.

Brad Heppner, CEO, Beneficient: Thanks Anna, we appreciate the time. Thank you.

Anna Berry, Host, Emerging Growth Conference: All right everyone in just a moment you’ll be redirected to the registration page for the next conference. Please reserve your spot early and behalf of all of us at Emerging Growth, we want to thank all of our presenters and attendees for making this such a great success. Remember, complete replay of this conference will be on our YouTube channel, youtube.com/emerginggrowthconference, and follow us on X at EmergingGrowthC. I’m Anna Berry and we’ll see you next month. Looking forward to it and have a great month.

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