Tracker on Tokens (sample email)
Dear Fréderic,
Thank you very much for getting back to me.
Please find enclosed our factsheet on the solution and a product questionnaire.
As mentioned, I would rather advise you a product with lower start-up costs instead of creating your own issuer. An issuer plus initial product in the first year will cost you well over CHF 50k. The problem is that if you don't reach the expected size, which I have seen over and over again, you are tied to high fixed costs without escape. If you are convinced that you can raise far more than EUR 20 mio and such costs do not scare you, I would rather set up a fund in your position, which is the Rolls Royce format and allows you to grow further (approx. 6 months to set up). We have a fund solution provider for crypto/tokens in Malta. Unlike the Guernsey tracker, you are allowed to distribute it continuously to professional investors across Europe, while the Guernsey products are not approved for distribution in Europe. With these Guernsey products (private placement) you collect the commitments in advance ("club deal") and will not promote a finished product (no distribution). Should other investors want to participate later, you would have to launch a new tracker, with slightly different conditions.
The Guernsey solution discussed concerns a basket of listed tokens on real estates and takes about 2 months to set up.
Very important: Even if it is a static basket, a strategy manager is required who has to rebalance the portfolio if necessary and ensure that there are always enough funds in the product account at the paying agent to cover the running fees. The product sponsor (your/the company) acts as the strategy manager. This means that timely cash transfers from the "custodian and broker" to the paying agent must also be initiated by the strategy manager (you).
Such Guernsey solution on listed tokens is classified as a structured product / alternative asset and is a contractual product within an existing issuer (from our cooperation partner).
Indicative pricing:
Structuring costs CHF 10k (only listed tokens)
Running costs 70bps p.a. & Product maintenance CHF 2500 p.a.
For issue size $1mio equivalent or more.
(All prices excl. VAT and to be paid upfront)
In addition to the above fees, there are some additional costs to consider:
Custodian & Brokerage fees (my partner may suggest a solution if you have no plan yet)
Stamp Duty on initial subscription amount 15 bps (only 99.85% reach the custodian account!)
No stamp duty apply on rebalancings.
Secondary market (just in case) 50bps above and below NAV apply.
Once the final product conditions have been confirmed by the product sponsor, subsequent changes, e.g. issue date, etc., are subject to a charge of CHF 1500!
A questionnaire must be completed if you like the Guernsey solution and wish to proceed. You can fill it out and we will subsequently complete it together before arranging the meeting with our cooperation partner.
We would match you with one of our cooperation partners for final contracting and implementation. Our margin is included and not added to their commercial offering.