Unlocking Opportunities for Discerning Investors
In the dynamic world of investments, experienced investors seek opportunities that align with their expertise and financial goals. ASMX Group recognizes this need and has introduced the ASMX Experienced Investor Fund (EIF) as a gateway to exclusive investment possibilities. In this blog post, we will delve deeper into the ASMX EIF, its key features, unique benefits, and how it serves as a catalyst for financial growth.
The EIF, which we call the ‘Growth Finance’ EIF is a sophisticated investment vehicle crafted by ASMX Group to cater specifically to experienced and professional investors. The fund is administered and regulated out of Gibraltar, is audited annually and has directors who are required to be approved by the Gibraltar Financial Serivces Commission.
The Growth Finance EIF is specifically designed for experienced or professional investors who meet certain criteria. While the specific eligibility requirements may vary, typically the fund is open to investors who have a higher level of knowledge and expertise in financial markets.
Here are some common factors that determine eligibility:
Accredited Investors: The fund may be available to accredited investors who meet specific income or net worth thresholds as defined by regulatory authorities.
Institutional Investors: Institutional investors, such as banks, insurance companies, pension funds, and other financial institutions, may qualify to invest in the EIF.
High Net Worth Individuals: High net worth individuals, who possess substantial financial resources and meet certain asset thresholds, may be eligible to participate in the fund.
Qualified Investors: Qualified investors, as defined by applicable regulations, who have a strong understanding of investment risks and have demonstrated their ability to make informed investment decisions, may be allowed to invest
The minimum investment in the fund is £100,000 but subsequently can be £1,000.
The Growth Finance EIF employs two powerful investment strategies to drive growth and maximize opportunities. Firstly, it focuses on underwriting fund raises on exchanges. Meticulous analysis and assessment of companies’ fundraising activities allow the EIF to underwrite suitable placements, ensuring companies meet their fundraising targets effectively.
Example: Seamless Underwriting and Sophisticated Sell-Down with ASMX EIF
Imagine a company looking to raise £1 million for its expansion plans. With Growth Finance EIF the fundraising process becomes seamless and efficient. The EIF steps in as a reliable partner, fully underwriting the deal, ensuring the company achieves its target through its raise on an ASMX connected platform.
Growth Finance EIF charges a competitive underwriting fee for its comprehensive support. This fee covers the EIF’s commitment to fully underwrite the fundraising, providing the company with the assurance and confidence it needs to move forward and is where EIF investors get their return. By underwriting the deal, ASMX EIF guarantees that the company will raise the desired £1 million.
Once the fundraising is successfully underwritten, Growth Finance EIF applies its expertise to sell down its holdings. Utilizing a sophisticated algorithm on the exchange, the EIF strategically manages the sell-down process. This algorithm ensures optimal execution, taking into account market conditions, demand, and investor preferences. As a result, the EIF can effectively and efficiently sell its holdings, allowing investors in the wider community to participate in the company’s growth.
By leveraging Growth Finance EIF’s underwriting and sell-down capabilities, companies can secure their fundraising targets while investors benefit from the opportunity to invest in promising ventures, including companies listed on other exchanges. Growth Finance EIF’s commitment to seamless underwriting and sophisticated sell-down exemplifies its dedication to unlocking value for both companies and investors.
Secondly, the EIF capitalizes on pre-listing funding opportunities, providing vital capital to companies before they officially list on an exchange. This strategic approach positions investors at the forefront of exciting investment ventures.
Example: Strategic Pre-Listing Funding with Growth Finance EIF
Consider a dynamic company preparing for its listing on an exchange. To facilitate a smooth transition to the public market, the company seeks pre-listing funding of £1 million. Growth Finance EIF steps in as a strategic partner, offering a mutually beneficial solution.
Growth Finance EIF recognizes the potential of the company and its commitment to listing. The EIF invests in the equity of the business at a discounted valuation, taking into account market expectations. This strategic investment not only provides the company with the necessary funding but also establishes a strong partnership between the company and Growth Finance EIF.
By investing in the equity of the business at a discount, Growth Finance EIF aligns its investment with the expected market valuation. This investment strategy benefits both the company and the EIF. The company secures the required funding, while the EIF positions itself to capitalize on potential value appreciation upon the company’s listing.
Upon listing, the EIF gradually sells its holdings in a controlled manner through its sales algorithm, taking into consideration market conditions and investor demand. This approach ensures that the sell-down process is executed strategically, allowing the wider investor community to participate in the company’s growth.
Through this strategic pre-listing funding strategy, Growth Finance EIF supports companies in their journey to the public market while maximizing potential returns for its investors. It exemplifies the EIF’s commitment to unlocking value and fostering growth opportunities within the ASMX ecosystem.
Benefits for experienced investors
Investing in the Growth Finance EIF offers a plethora of benefits for experienced investors. Firstly, it grants access to an expansive range of investment opportunities within the ASMX ecosystem. Whether it’s equity, debt, or security tokens, investors can actively participate in exclusive placements available from any of our connected platforms. Secondly, investors benefit from the expertise of ASMX Group’s seasoned professionals who meticulously select and assess potential investments. This knowledge and insight enable investors to make informed decisions and seize opportunities with confidence. Furthermore, the EIF presents opportunities for capital growth, potential returns, and portfolio diversification.
The base return, or ‘watermark’ on the Growth Finance EIF is 7% return after that the return is spilt 50/50. The reason for this is that there is an increased incentive for the managers to make sure that they are doing a good job of identifying opportunities that are solid, and identifying many of them. The more the funds are turned over into transactions the more the fund owners and managers are remunerated.
For example, if only 7% return is made in one year the investors in the fund receive 7% of the profits, i.e 100% of the return and the managers get nothing. If 20% is the return of the fund the following year the investor gets 13.5% return (representing 67% of the profit), if the return is 50% on the fund the investor receives 28.5% return (representing 57% of the profit). The majority of the funds earned by the fund owners (ASMX Group) will be remain in the fund and be invested alongside investors and will always be used as a ‘first loss’. So should one year be -7% performance the accumulated profits of ASMX Growth Finance EIF will be used to pay the 7% watermark. This further incentivises managers and owners to be mindful of the risks being taken as the first loss is on the manager’s and owner’s funds.
As with any investment there are risks and the risks within the Growth Finance EIF are reasonably complex which is why it is only suitable for those who can accept the risk and understand it. The main risk is in the holding of investments and the liquidity, i.e if a deal that has been underwritten is not well received by investors and there is low liquidity, the EIF could hold onto the securities longer than expected, exposing the EIF to the normal risks of holding securities when it is intended to be a short term holder.
This is specifically why the EIF was created as a fund so that the directors and managers can scrutinise each potential transaction and guage the levels of these risks against the risk profile of the fund.
Benefits for Fund
If you are looking at this structure as a potential owner, and have a good strategy, then ASMX may allow your fund to be marketed to qualifying investors within our network, we are always on the look out. As an owner the structure is cost efficient to set up, ASMX can arrange onboarding of investors through our technology used by regulated connected platforms launching thrughout the world and we have partnerships that can provide the regulated directors, the administrators and everything you need to set up a fund.
ASMX are particularly interested in speaking with innovative property funds, everything AI, blockchain applications and disruptive technology applications in finance, Medtech and Regtech.
If you are interested in a fund of your own, or investing in the Growth Finance EIF then do get in touch and we will point you to the team members who can help.