Rethinking Investment Funding

The existing reality of investment funds is plagued by a number of issues that make them less than optimal investment vehicles. They are illiquid. Investments are medium-term prospects. The interests of the limited partners are secondary to those of the managing partners. Access is limited to a small number of sophisticated investors.

We propose the creation of a fund in which these issues will be minimized. The purpose of the fund is to issue a cryptocurrency and use the proceeds to invest in a variety of existing assets and businesses. The cryptocurrency will be backed by these assets. Holders of the currency, members, will be entitled to access products and services of the companies controlled by the fund at preferential rates.

The fund will have three primary investment compartments: real estate, private equity and entrepreneurial. As the investment in the funds shall be mostly liquid having been compensated by the issuance of the cryptocurrency, it will not be subject to the existing pressure experienced by classical funds of acquiring assets and divesting them within a number of years. The incentive for growth will instead be shared by the management and the members as the compensation will be paid in cryptocurrency and based on the growth of the fund.

Real estate will invest in real property assets with the goal of ensuring a stable foundation securing the value of the fund and its associated cryptocurrency. The real estate portfolio is expected to be diversified acquiring existing properties and developing new projects and complement the growth of the other compartments.

The private equity compartment will invest in existing companies reinforcing the efficiency of the overall structure. As such, it is expected to take a controlling interest in one or more real estate asset management companies and may acquire builders where advantageous. In addition, it is expected to acquire interest in cryptocurrency actors such as exchanges, wallet providers and payment service providers. Further, the compartment will invest in companies with forward-looking disruptive products and services, such as asset-sharing platforms, monetization applications and sustainable enterprises.

The entrepreneurial compartment will be responsible for creating new businesses in the field of new technologies. As such it will act as an angel investor or venture capital fund where it sees opportunities and find and nurture new companies. It will also identify new areas of potential growth and create new companies to develop new services and products.

As an example of the integration of these compartments, the fund expects to acquire one or more highest standard real estate assets (preferably by identifying a distressed property and transforming it into such an asset). The property will then be exploited through a controlled management company. Finally, a new company will create a virtual experience based on the property allowing a shared experience for virtual visitors.