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Private Placement Programs 2013 Style

Posted by RYON PATTERSON on February 3, 2013 at 4:45 PM Comments comments (0)

This brief blog will be focused on a few of the realities of private placement as of 2013. My goal for this quick rant is to prevent some of my friends/clients/brokers from wasting their time and risking their money inappropriately. In order to meet this goal, I will need to explain the two most important aspects of ANY private placement deal:

 

“Collateralizing Funds” and “Profit Distribution“.

 

If this is something you are interested in, please continue reading. Below, you will find that problems are identified as well as viable strategies offered that could prove to be solutions.

 

“Collateralizing Funds”

 

The primary issue with most PPPs (Private Placement Programs) is naturally, the risk factor.

 

In complying with a “MT760″ in favor of a “trader’s trust,” you are in effect collateralizing your assets in favor of that particular trust. In more clear terms, YOUR FUNDS ARE AT RISK if the trader was to default on the line of credit they drew against the asset. Also, the cost for blocking funds usually is 1-2% of the face value, which is actually paid upfront to the bank. Trust me when I say that this is not a desired position to be in. Upfront fees, the trader is now in control of your money, and you are really clueless as to how your funds are being invested.

To continue reading: http://lordpatterson.wordpress.com/2013/02/03/private-placement-programs-2013-style/