Sorry for the separate post.
Just wanted to go through some numbers.
Example 1: the fund makes no money but just plays even. Fund intrinsic value = 80 million for 100% of the coins. Team gets 8 million (10%). This seems so weird to me. Does the fund have to make up the fee before dividends are started?
Hi, we are not charging the management fee for the pre-ICO sale. At 1.34 Bn coins, we raise $52 million and $5.2mn annual performance fee.
The guaranteed quarterly bonus will be given out.
Example 2: the fund loses 40 million, fund intrinsic value = 40 million for 100% of the coins. Team gets 4 million? This seems very wrong for me. I see no mention of a high water mark. Why are you guys not working with a high water mark if you are so confident you will make money? I am sure this would ease the minds of potential investors.
Hi, our watermark is the performance of the Bitcoin.
Target Coin team is taking 13 % of the coins (80 * 0.13) 10.4 million worth of coins. Besides dividend on these coins 15% of total profit. With all this in mind I think 10% standard fee + no high water mark (investopedia is your friend if you dont know what this means) sends a wrong signal, conflicting with the confidence that the white paper sends.
Target Coin team is buying the coins at a discounted price, putting in personal capital into the fund. We share back 85% of the profits back with the investors, unlike no profit sharing with the other cryptos and the price being purely speculative price.
With a normal, customary 1.5-2% fee and a high water mark this would be a no brainer for me as I believe the project has so much potential (although it would be nice to see some track record).
In the linked interview this comes along:
Does the team have a history of trading other assets?
The team as well as me have over 18 years of experience in trading and investing in equities, foreign exchange as well commodity markets. Our primary focus has been the concentrated equities portfolio which as we speak is up over 90% in the past 3 years.(i.e a CAGR of over 28% YoY)90% over the past 3 years is not normal. Not a single hedgefund in the world makes 28% per year consistently.I am not saying scam at all! I actually believe Crypto gives a lot of opportunity for long/short funds, but I would like to see what the 70-200% RISK ADJUSTED return is based on/how it is calculated.
Here is the snapshot of our equity holdings -
http://imgur.com/a/TK8HnYou can also check our analysis and calls that we made on twitter. 90% of them hit the target in the past one month! We called for ethereum short when it was at 360 and 270 with the targets of 190.
The 70-200% risk adjusted returns are achieved by maintaining a high reward to risk ratio. With a minimum of risk to reward ratio of 1:2.5 and accuracy being just 50%, it generates 75% returns.
Yes, the entire fund won't be levered up at any point of time, but on an average we plan to generate a minimum of 50% returns.
Finally, if 85% of profit is paid to token holders, and 15% is charged as a performance fee. You start with 80 mln, aim to be 500 mln in 2019, where does the other 420 mln come from? All the profits after 10% fee go to the team and the token holders. Perhaps I am missing something really simple, so please enlighten me :-)
The team plans to reinvest most of the management and performance fees. Depending on our performance and investor demand, we plan to raise additional capital without diluting the existing tokens.
Don't get me wrong, I am very disturbed by the ridiculous 10% fee and the lack of high water mark, but good traders in immature volatile markets have so much potential, I could still put my money in this ICO!
10% fees are for the first year. 3% guaranteed bonus will be give back that leaves us with 7% management fees. We plan to invest a significant amount of money into HFT crypto trading and TargetX software which will be free for all token holders. We plan to revise the management fee after the first year.
Thank you for your questions.
