Market Discussions

4. VEMEX Exchange

All the Funds covered by this IPO will be traded on the Vahrokh's EvE's Merchantile Exchange [VEMEX].
Easy Fund Investors will have little interaction with it, in fact at IPO launch they'll receive their shares and everything will go on autopilot until they want to redeem them (redeeming is done by "selling" on the Exchange). Perspective Easy Fund Investors who will join the Fund after the IPO launch will have to use the Exchange to purchase the shares instead.

In this first iteration, VEMEX is a traditional, teller based securities trading exchange.
There's a quite detailed page explaining in detail how it works, possible fees and so on.

This version of VEMEX is based on a Google Spreadsheet available at this location.

Illustrated usage examples about how to use the exchange to setup orders are provided in the draft thread, at this post.

In case of difficulties, please feel free to EvE-Mail me and ask about your issue.

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5. Business Plan Overview

The Funds Manager will perform a number of activities, namely:

- Invest in fully collateralized loans and bonds (Easy Fund only).
- Buy and hold and then sell the various Funds underlying commodities (long term strategy).
- Station trade the various Funds underlying commodities (short term strategy).
- Decide if and when to switch from long to short term strategy or when use a mix of the two. The short term strategy will be mostly used during downturns of the markets (see summer). As a safety precaution, lower profits will be chosen over overwork leading to burnout.
- Constantly evaluate the current baskets underlying commodities, in order to take in the better performers and out the worse performers.
- Decide one or multiple hedging strategies, including saving some of the profits made in the best seasons in order to release them during the worst ones (this makes the investment curve smoother).
- Decide how much capital to keep liquid. This is going to be expecially prevalent on the Easy Fund, because Investors may come and go as they wish and thus a certain guaranteed liquidity has to be held.

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6. Management

Due to the number of tasks involved at managing the Funds, there will be a management fee, in the meausure of 7 percent on the net capital gains.
Full details about this and other aspects about the Funds are available at each Fund's prospectus page.

After the reservation phase is over and Investors have sent their money, each of them will receive a corresponding number of shares. From now on, Easy Fund Investors have nothing else to do, while the others may either do nothing (and just take dividends) or trade their shares.

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7. Expansion and Exit Strategies

In case the funds are performing very well and are close to their caps, they may be expanded.
Closed end funds will have additional shares issued and current Investors holdings will be adjusted so that their shares don't get diluted. Notice how this is going to be a very rare event.
The Easy Fund is open ended instead, so it may potentially grow forever. It is going to be capped however, the planned total NAV across all the funds is 100B, with a forecast ability to output a 2 percent ROI.

In case the Funds have to shut down, the Management will do the possible to liquidate the underlying stock as fast as possible. This may take a while in case of low EvE activity periods of the year.

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8. Investor Key Facts

- At IPO launch, the shares face value is 1M ISK. This applies to all the funds.

- Dividends will be paid monthly, possibly within the end of the first week of the month. The first dividends will be paid on December.

- Dividends will be calculated as 90 percent of the profit less the management fee. It is possible that some profits could be held to improve the "low of the year" months performance.

- VAHFT may force buyback of shares at their nominal value (in example, in case of Funds shutdown or downsizing). If possible buybacks will be notified a month in advance. Buybacks will be spread across all the Investors of the affected Fund.

- There is a grand total NAV cap currently set at 100B. The closed end Funds total NAV cap is currently set at 60B, leaving 40B for the Easy Fund. Depending on the IPO success, these caps may be altered but the 100B grand total cap is here to stay. At first, Market Makers will be limited to 40B (of the closed end Funds, the only available to them).

- All the IPO launch shares incur in no fee whatsoever and they will not need to do anything on the exchange at all. Only post launch activities will and usually only in case of sales.

- Easy Fund Investors may simply redeem their shares, they don't have a secondary market. They may also trade their shares out of the exchange but then they will have to notify VAHFT about that, otherwise the old shareholder will still receive the dividends. In case of private trading, the former share holder is meant to give a pro-rated dividend to the new share holder. In no circumstance VAHFT or VEMEX will disburse missing dividends.

- Closed end Fund Investors may not just redeem shares. Like for stocks trading, they have to find a buyer on the exchange. VAHFT provides a "bailout" emergency mechanism so that even closed end Fund Investors may directly sell their shares back to VAHFT itself, but with a fixed penalty of 8 percent. Added to the exchange fee, this easily becomes 10 percent.

- The ability to short sell is only available to closed end Funds. VAHFT may decide at their sole discretion to stop accepting short sell orders (they require additional liquidity).

Reservations are open to Corporations as well as Individuals?

Just to make certain, you are going to be my delagate Vaerah?

Yes, you have to specify the name and ticker.

Thanks Vaerah :D

Sure, please remember you will have to repeat this same statement after the reservations open.

I hereby reserve 10B worth of shares for my corporation Vahrokh Consulting [VAHCO] to be evenly spread across the funds.
In case they don't fit, I'll accept to fill eventual gaps.


Moreover I have been made Delegate for the following Investors:

Samroski => 10b equally across all the 4 closed funds i.e. 2.5b each. Reference.
Vargan Armer => 250m on the mineral fund and 250m on the T2 fund. Reference.
Grendell => 20b on open end fund. Reference.
Nanatoa => 10B spread evenly across the first four funds, as a market maker. Reference.

yo ho all


i would like to reserve 10 billion in the easy fund.


jadun

I'd like to reserve 5 billion spread across the funds.