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Our wholly owned subsidiary, Fund.com Managed Products, Inc. specializes in developing asset management products. We intend for the products specifically to include the identification, construction and publishing of investment indices. The indices are intended to be designed to provide investors and the investment community additional benchmarks for measuring absolute and relative investment performance. Indices can assist investors in better understanding the performance of their own investment portfolio as against the indices and, therefore, may be helpful information tools.
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| EQUITIES Hedge Fund Index |
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Since 1990, assets invested in hedge funds have grown from $8 billion to over $2.26 trillion (according to the HFN Hedge Fund Industry Administrator Survey). Despite this, getting reliable information about these investment vehicles remains as difficult as ever. In response, over the last year EQUITIES has constructed an index comprised of 25 leading hedge funds. The result is the EQUITIES Hedge Fund Index.
Hedge Funds are Going Mainstream
Great investment ideas always start with the early adopters with access -- institutional investors, high net worth individuals and other sophisticated investors. Hedge funds are following this pattern, just as mutual funds did over the last two decades. Through financial innovations, hedge funds are now opening to a wider investment community and becoming an essential cornerstone of a well-constructed investment portfolio.
The comparison of the historical development of mutual funds is compelling:
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1983. 15.3% of Americans owned stocks. |
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2007. 63% of Americans own stocks. |
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1970. 270 mutual funds managed $48 billion. |
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2007. 8,700 mutual funds manage $11 trillion. |
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1990. Hedge funds controlled $8 billion. |
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2007. Hedge funds control $2.26 trillion.* |
* Despite this, in 2007, less than 1% of American investors own hedge funds.
We believe the historical pattern is clear. We believe hedge funds will continue to grow and Americans will gain greater access to these important investment vehicles.
| Fund.com Licensing |
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Our plan of operations includes licensing our content to third parties. Our content includes proprietary indexes that we intend to publish, as well as service marks and trademarks associated therewith. Third party product providers, like banks and asset management companies, license a range of indexes from our competitors, such as the Russell 2000 from the Frank Russell Companies or the S&P 500 from Standard and Poors/McGraw Hill. We plan similar business arrangements to license our indexes in return for the payment of licensing fees. We intend that the license fees will be charged based on a percentage of assets benchmarked to our indexes. Therefore, we believe our success in generating license fees will be substantially dependent on the success of third parties in structuring the index-linked products and the successful sale of those products to investors. We will have no direct participation in the creation of such products. Our plan is to initially license our index to a third party provider that is offering variable rate index-linked bonds maturing on the twelfth anniversary of their issuance. We believe that this represents long term recurring license income to us should our licensee be successful in marketing its index-linked bonds.
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