Gerova Completes Acquisition of $1.2 Billion Life Insurance Portfolio and Arranges $50 Million Credit Facility

HAMILTON, Bermuda, Jan. 4, 2011 /PRNewswire/ -- Gerova Financial Group, Ltd. ("Gerova") (NYSE: GFC), a diversified financial services company, announced today that it has completed the acquisition of a portfolio of life insurance policies and loans on life insurance policies representing approximately $1.2 billion of in-force life insurance. The portfolio consists of 180 policies issued by highly rated insurance carriers with 96% of the carriers in the Portfolio rated A, A+, or A++.

The portfolio was acquired from HM Ruby Fund L.P., a Los Angeles-based hedge fund, for $105 million, consisting of $11 million in cash and $94 million in Gerova ordinary shares. The share consideration of $28.69 per share was based on the average closing price of Gerova on the New York Stock Exchange for the ten trading days ending December 30, 2010. The 3,276,403 shares to be issued in the transaction represent 10.2% of the issued and outstanding shares after giving effect to the issuance.

Concurrently, Gerova arranged a five-year $50 million line of credit. The proceeds will be used to service the portfolio, and to service future share-based portfolio acquisitions in the life settlements sector.

"This transaction reaffirms a key aspect of our business model, using our publicly listed shares to acquire private equity portfolios on favorable terms," said Keith Harris, incoming Gerova Chairman.

On December 7, 2010 Gerova announced two other all-share transactions, agreeing to acquire institutional investment banks Seymour Pierce Holdings Ltd. and Ticonderoga Securities LLC.

"Today, Gerova acquired over a billion dollars of high quality financial instruments issued by investment grade rated institutions in exchange for Gerova equity, which substantially enhances our company's balance sheet and our earnings potential as we plan for the integration of Seymour Pierce and Ticonderoga," continued Harris.

Wholly-owned subsidiary Gerova Advisors LLC arranged the transaction.

About Gerova Financial Group, Ltd.

Gerova Financial Group is a diversified financial services company that aggregates permanent equity capital through the acquisition of private equity portfolios in exchange for its shares, and then redeploys the acquired assets to provide additional capital for income-producing financial services companies. Gerova went public as a Special Purpose Acquisition Company (SPAC), then in January 2010 successfully became an operating company as a result of acquiring nine private equity portfolios and operating insurance companies in exchange for its public shares. In December, Gerova announced the all-share acquisitions of investment banks Seymour Pierce and Ticonderoga Securities. Gerova was admitted to trade on the NYSE in September 2010 and is listed in the Russell 2000® index published by Russell Investments, a ranking of the top US-listed public companies.

For further information concerning the terms of the proposed transactions involving Seymour Pierce Holdings Ltd. and Ticonderoga Securities LLC, please refer to Gerova's Form 6-K filed on December 7, 2010 with the US Securities and Exchange Commission.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company, its acquired assets and the Company's business after completion of the transactions consummated in January 2010. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, which are based upon the current beliefs and expectations of the management of the Company, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the Forward-Looking Statements: (i) potential material reductions in the value of a substantial portion of the Company's assets acquired in connection with the business combinations consummated in January 2010; (ii) officers and directors allocating their time to other businesses or potentially having conflicts of interest with the Company's businesses; (iii) success in retaining or recruiting, or changes required in, the Company's officers, key employees or directors; (iv) the potential liquidity and trading of the Company's public securities; (v) the Company's revenues and operating performance; (vi) changes in overall economic conditions; (vii) anticipated business development activities of the Company following consummation of the transactions described above; (viii) risks and costs associated with regulation of corporate governance and disclosure standards (including pursuant to Section 404 of the Sarbanes-Oxley Act of 2002); and (ix) other relevant risks detailed in the Company's filings with the SEC. The information set forth herein should be read in light of such risks. Neither the Company nor any target companies or funds we intend to acquire assumes any obligation to update the information contained in this release.

SOURCE Gerova Financial Group, Ltd.

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