GWhen it comes to blockchain technology, the focus is on crypto assets such as Bitcoin. For some observers, however, the real potential lies not in these but in other applications such as asset tokenization. This tokenization means nothing more than the finest division of asset ownership. The blockchain makes this comparatively inexpensive compared to conventional methods. This opens up access for small investors to asset classes in which high access thresholds previously denied them access. Hamburg-based Finexity is one of the most active houses in this business. Had this started with real estate, a screen print soon followed Andy Warhol plus a Chateau Lafitte, pink diamonds or vintage cars.
Now Finexity has a completely different offer. Together with the software investor DRS, they are now offering a tokenized private equity fund for the first time. This means that shares can be subscribed from as little as 500 euros. So far, investors usually had to bring 10,000 euros for a fund of funds, but usually at least 200,000 euros for other forms of investment.
software in view
The DRS Opportunity Fund is to take over three to five founder-managed software companies and develop them further through targeted measures for strategic buyers. So far, the five-strong DRS founding team had mainly invested their own money. It is said that they will now also participate in the investments with a significant share of their own capital.
Some of the founders are known as partners of the Munich private equity investor Perusa, where they appeared a few years ago around the ailing pet supplies manufacturer Karlie. The managing DRS partner Andreas Spiegel was the managing director there at the time. According to the information sheet, the DRS partners have achieved a four-fold increase in value in various activities with 35 transactions over the past 30 years.
The fund is to have a gross volume of EUR 25 million, invest four to six years and run for a total of ten to twelve years. Anyone with less than 25,000 euros comma has to live with somewhat less favorable conditions. The profit participation is only 80 percent and the issuer receives a performance-related fee from an interest rate of 1 percent. Both values increase with the deposit amount, from 2.5 million euros there are the conditions on request.
The fund should achieve an increase in value of more than three times or an internal return of more than 25 percent. However, it should be noted that this is not comparable to the interest on a bond, for example. Since the amount of invested capital fluctuates and the returns vary, this calculation method is considered the best possible and is internationally common. However, their major weakness is that it is assumed that all income is reinvested at the same interest rate and that the calculated return cannot be achieved at all, so that the actual income is usually lower, usually significantly.