Market Discussions

ESYFND investment strategy and assets allocation

For the first month ESYFND will keep low spare ISK for share redemptions (in fact there will be none) so to maximize the potential profit with no dormant liquidity.

Once the initial phase is over, ESYFND may opt to hire liquidity providers in case of sudden large liquidations.
The default liquidity provider will be VAHFT itself. VAHFT will have an increasing available liquidity starting from February 2013 up to about 20B.
This arrangement will also be activated in case ESYFND will participate in 3rd party fully collateralized investments. VAHFT will take a 1% cut off those deals as payment for the liquidity providing service.

Of course if there are willing 3rd party liquidity providers who want to participate, I'll check their offers, as long as their service won't cost more than 1% of the provided sums.


Assets allocation:

Al launch, it's planned to have a NAV equal to 40B. While waiting for 3rd party collateralized opportunities to show up, that NAV will be invested in the other funds. As ESYFND is not meant to be highly speculative (and thus risky) it will put 20B on MINBSK, 10B on ICEBSK and 5B on each T2BSK and PIBSK.

Can we have an idea of the queue? I would like to know if I have any chance in the Easy Fund.

Funds transferred, well done VV!



I may be interested in offering liquidity services should the need arise, either directly or through M-Spec (MTLS), our industrial materials investment firm.



Great plan for initial allocation of ESYFND assets, although these investements will materially alter the size of each basket fund. Do you anticipate any adverse impact to the basket fund investment strategies resulting from the sizeable inflows (and, presumably, eventual outflows)? Might be helpful to expand upon how the mechanics of the ESYFND investments will work. For example, let's say ESYFND has an opportunity to place a 10b collaterized investment. How will ESYFND liquidate 10b in basket fund holdings?

-T-

Hmmm don't see my name on either of those lists




Did that reservation not get taken into account?

Too many replies to quote so I'll go Twitter style.

@Towaoc

1) Thank you for your interest. The liquidity service (in RL and in EvE) is meant exactly to provide short injections of ISK in case of fund liquidity shortage.

I am still studying the practical implementation, I could either implement an assets swap (like they do for ETFs) i.e. you get the equivalent in minerals for the "loan" duration as collateral.
Or I could throw some of my own stuff, but it's not as clean, since my assets have nothing to do with the funds.


2) About the ESYFND "interactions" I had to beat my head a lot but I came up with a decent solution. I am going to simplify a bit.
Basically at day zero a coefficient between the distinct NAVs of the various closed funds and ESYFND has been calculated.
It's not just a direct coefficient, as ESYFND (as posted earlier) NAV is not evenly allocated along the others.
The aggregate coefficient is used to split ESYFND NAV in portfolios. In the first month (no ESYFND shares sale) it will track the other funds, a bit like an index.
Afterwards, two portions are reallocated to leave room for some investments and free cash for shares redemption.

The whole thing produced some quite large Excel sheets, actually 13 sheets. Part of them are database backed. The amount of math is enough that when I update a cell, it takes a visible delay to propagate the changes.

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@Tornsoul

You did not see your name because the 100B filled within some hours and further Investors were put in queue (in case others don't fill their reservation by Oct 31).
But please see below @Grendell.


@Samroski
The queue is quite long.


@Grendell

If you'd like to split your reservation with Tornsoul, be welcome!
I suppose you'll take 10B each?

Also, if you are OK with it, I can send you API keys of VEMEX teller, VAHFT so you can check the various transactions being done.

Of course I already borked a transaction, as Graygor sent money to the wrong place and when re-routing it in the correct wallet, made the correct wallet glitch a bit.

Confirming receipt of the following reservations:

Samroski as Market Maker
Graygor => Sent back the double ISK you sent.
Huttan Funaila
Rebecca Cairn
Irken Slushk as Market Maker
Dean Ozuwara
Rhat Dakota
Val'Dore on behalf of PlanetCorp InterStellar
Elegbara
Jadun
Towaoc


The following Investors have up to October 31st 23:59:59 EvE time to send ISK (else their reservation will be taken over by the next Investors in queue):

Vargan Armer
Grendell
Nanatoa
Mortimer Montague
De Guillaume
Ford Chicago
Kama Sutramax
Seth Quantix
Grombutz

Ok.


The next Investors in line for the closed funds are:

Amallya Trueshot
Erialor Godsent
Cipio Hakoke

If you are interested in replacing De Guillaume please tell about that in here. There are 2.5B per closed fund available.

Edit:

I'd REALLY love if the 10B would be filled by a request for MINBSK or ICEBSK, I found out the markets for T2 and PI to be too weak to support the big imbalance in reservations we got towards those two baskets. They also get to pay an additional 1% fee on resale.

Please send ISK, indicating on which fund to put them. ESYFND is full, you may bid up to 10B in total, on MINBSK / ICEBSK or up to 2.5B for T2BSK and PIBSK.

I will send the money as soon as, due to stupidity, I've reinstalled the EVE client :D

You asked a question "could I...", not a proper (imperative writing) reservation.

However I don't think the other Investors would riot if I took 20M (out of 100B) beyond the cap.

Let's see today if anyone has strong feelings against taking the 20M, if they don't then I am ok.