United Financial Technologies
United Financial Technologies
United Financial Technologies
United Financial Technologies
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CVRDN; FUND APPLICATION

United FT is committed to developing new and exciting applications for its proprietary financial technologies.  In today's marketplace, even the best fund managers are struggling to increase assets under management and to achieve the kind of scale that can amplify their successes, diversify their positions, and enhance performance in order to better deliver on projected returns for their investors.  Likewise, investors in credit-linked as well as other investment strategies are balancing the need to meet minimum investment returns with decreased amounts of available capital while trying to guard against the type of market downturns, complex leverage risks, and unforeseen risk correlations that carried their portfolio values downward since 2008. 

With an eye to identifying ways to strengthen and coordinate a synergistic relationship between hedge funds or other investment funds with institutional investors, pension funds and family offices, United FT has ....

United Financial Technologies
INVESTMENT FUND APPLICATIONS

In applying the CVRDN as a licensee, a Fund Manager is able to offer a new "unfunded" access point to its investment strategy for use by both existing and new investors.    Under this model, the Fund Manager causes the issuance and placement of a CVRDN with select Qualified Institutional Buyers, creating a pool of capital.  These CVRDN proceeds are placed into a reserve account in the name of the Fund and governed by a third party trustee where they will await the Fund Manager's subsequent delivery of specifically formatted letters of credit, known as Principal Letters of Credit, which by there nature are not intended to be drawn under a performing CVRDN transaction.  The Principal Letters of Credit act to credit enhance the CVRDNs, triggering a note conversion feature that releases reserved proceeds expressly for application to the investor-approved investment strategy of the Fund. 

Using this mechanism, a Fund can cost-effectively raise a pool of lower cost debt capital to be deployed to its investment strategy ...

United Financial Technologies
CREDIT ENHANCEMENT

The effective use of the CVRDN in support of a capital raise for a hedge or investment fund hinges on the availability of credit support for the investment strategy being employed by the Fund.  In a conventional capital raise, both capital and related credit support are derived from a single source -- investment commitments from investors seeking to invest in the Fund.  In the case of a CVRDN, capital is sourced from a specific segment of the capital markets that has an appetite for the high-quality credit the CVRDN has to offer, while credit support for the Fund's investment strategy is derived solely from the same group of investors that would have otherwise sought to invest cash in the Fund.   With the CVRDN, however, those investors have the luxury of conserving cash and still gaining exposure to the Fund's investment strategy through the issuance of specifically formatted letters of credit as a credit enhancement to the CVRDNs issued by the Fund.

At its root, the concept is a simple one; United FT has devised a methodology that disaggregates cash from credit, thereby ....

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United Financial Technologies
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United Financial Technologies