Frequently Asked Questions
Information on private, secured asset management programs
To see a FAQs page on LTNs, Click Here.
1. What about fees?
The private funding programs we illustrate on this website typically require no up-front fees. Whenever a program requires payments of any kind in advance, we advise clients to be extra careful in their due diligence efforts. That said, if a program requires up-front fees but exhibits proof of performance or has other features which reduce risk, it may still find a place on our website. Every program pays fees to the intermediaries who are responsible for introducing clients/investors to the program principals. These fees are typically paid on the yields produced by the funding program. If you are uncomfortable paying for services and information that benefit you, then we encourage you to move along to another website.
2. What is a Private Placement Program or a Secured Asset Management Program?
A private placement program or a secured asset management program is a program of managed transactions commonly used by the very wealthy where the principal investment is fully or substantially secured through structured mechanisms provided by the program’s bank or the program group.
3. What kind of assets may be eligible to go into a private placement program?
Although some private funding programs may have more flexibility, we represent that private placement programs can only be entered with clean, unencumbered cash funds owned by the client and over which the owner/participant has full control.
4. Is a program participant putting his principal at risk by entering a high yield secured asset management program?
There is little risk of a participant losing his principal investment. The program participation amount is fully or substantially secured through structured mechanisms provided by the program’s bank or the program group. These mechanisms provide that the participant’s funds cannot be moved, transferred, encumbered or withdrawn during the program term. Before entering any program, potential participant's should carefully review program contracts to ensure they are comfortable with any risks associated with that program.
5. What funds are actually traded in a secured asset management program?
After the participant’s funds are protected, the program directors will put up, through their own credit facilities, counterpart funds equivalent to the value of the participant’s funds. These are the funds that are utilized for program purposes.
6. What yields are given to private placement trade program participants?
By contract, the program directors may either specify a "best efforts" yield or a guaranteed yield to participants as well as the length of the program and timing of yield disbursements.
7. What factors can affect program structure and/or yield?
8. What kind of transactions are done in a private placement program?
The transactions executed in these programs are the buying and selling of fully negotiable bank instruments. These instruments are delivered unencumbered, free and clear of all liens, claims or restrictions. The instruments are debt obligations of the top one hundred world banks in the form of medium term bank debentures of ten years in length. It must be stressed that, before an instrument is purchased, a contract is already in place for the resale of the bank debenture instrument. Consequently, the program’s funds are never put at risk.
9. What is the duration of these kinds of private programs?
Operations will take place approximately forty international banking weeks per year with specific transactions taking place approximately one or more times per week depending on circumstances. Although there are 52 weeks in a year, there are only 40 international banking weeks during which transactions take place. An international banking week is a full week which does not include an officially recognized holiday. This does not preclude, however, that transactions may occur on short weeks that have a holiday.
10. Why are these “high returns with safety” private programs not generally publicized?
11. How will the entire transaction become profitable?
12. Does the program adhere to generally accepted international business practices?
The truth is that there is no smoke and mirrors involved. All of the programs are conducted under the specific guidelines set up by the International Chamber of Commerce (ICC) known as ICC 500 . The ICC and your local Chamber of Commerce are not affiliated. The ICC is the regulatory body for the world’s great money center banks and is located in Paris, France. It has existed for more than 100 years, and exerts strict control on world banking procedures.
13. Can we participate in capital enhancement programs direct through the banking industry?
No. It should be pointed out that a few major U.S. banks do participate from within their banking operations based in Europe and the Far East, but they do not normally make their programs available to their customers. The chances are very great that your local branch manager has absolutely no knowledge of them, and may even deny their existence.The vast majority of U.S. citizens have not been made aware of the money making opportunities already available for fifty years to qualified European investors. The banks themselves are NOT allowed to take part in the management of these programs. This would lead to a massive cartel generating huge unregulated profits. The banks do, however, manage to make substantial profits from the program in the form of fees. Program management is the job of the non-bank private placement program providers.
14. What other opportunities are available to a qualified participant?
The providers themselves are also NOT allowed to transact or do business on their own behalf, so this presents an opportunity for qualified individuals to take part and to participate as the initiators of the various transactions. Initially, these privileged opportunities were not offered outside of the Western European markets, but as the world economy has continued to grow and more real money poured into the safety of West European markets they needed to put this capital to work earning profits. This allowed the door to be opened for the first time to American and Canadian participants and to provide them with a unique opportunity to accumulate capital in a confidential manner, and to decide for themselves how and where that capital will be disbursed. Recent restrictions put in place by the U.S. Government, however, have led many foreign banks to restrict U.S. citizens from participation in their trading opportunities as individuals. Sometimes U.S. citizens can overcome this restriction through a corporate entity participation.
15. What are the typical steps to private placement trade program success?
The client provides a proof of funds and passport copy along with their compliance package
Most of the assets that people try to apply with do not meet the criteria for secured asset management program. We represent that private placement transactions can only be done with clean, unencumbered cash funds owned by the client and over which the owner/participant has full control.
Program group submits application to the compliance department for review
Within hours, most program principals will know if the asset and owner are legitimate. Also at this time, the origin and history of the funds are examined to ensure that the funds are clean (i.e., without criminal background or involvement in money laundering, drug trafficking, terrorist activity and the like). In addition, if the client has over $100M, program groups typically either know of the applicant, or have seen the person try to apply before. There is a very small circle of real program providers, so when someone applies with large assets, the word gets around rather fast.
Client conducts “due diligence,” speaks with the program principal, and receives the contract
Most clients have never been involved with a private placement program before. Consequently, many will show the contract to their attorneys, who may advise against proceeding due to their lack of familiarity with secured asset management programs. Needless to say, this can kill the deal or, at the very least, make the potential participant feel uncomfortable. The problem at this stage is transparency and trust and due to the private nature of the secured asset management program business, there is only so much information the program principal can reveal—and this is a common obstacle that prevents some participants from proceeding.
Client signs the contract, and then the program principal countersigns it to make it official
If a client signs the contract and does not complete the transaction, they may be reported to the authorities, and by doing so, they will be permanently prevented from participating in any secured asset management program in the future. As we said before, there is a small circle of program providers, and if they label a potential client as a non-performer, it is rare that any other program provider will spend their time to work with them in the future.
Client contacts their bank to complete the private placement program transaction
Banks are in the business of making money, and customer requests are secondary to the profit of the bank. When a client asks to block, conditionally assign, or transfer their funds, they are cutting into the pockets of the bank. If the bank loses that asset, they actually lose up to 20x that amount in potential loans from their central bank (Federal Reserve). With this in mind, most banks stall with excuses since that will frustrate most customers enough to kill the transaction. Even though this may be an obstacle, this should never be a deal killer since it is the client’s money, not the bank's. To complete a deal, you either need a bull personality or a great relationship with the bank. Otherwise you may encounter problems with the final steps.
Client’s funds are blocked/reserved, conditionally assigned, or transferred to the program group in accordance with the contract
Very few program groups request that the client transfers ownership of their assets. If they do request this, be very cautious, and expect something is not as it seems. Most private placement program traders only need a conditional assignment of assets, temporary beneficiary access, or the blocking of the assets in their favor for the period of the trade. This allows them to access a line of credit based on those assets which they trade for the client as per their contract agreement.
Program provider accesses his bank's line of credit
The program provider is the only one who can access a line of credit against the client's blocked assets. The bank completes thorough due diligence on anyone it loans to, and when that loan involves millions of dollars, it is far more diligent. In short, no bank will offer a line of credit for millions to someone they do not thoroughly trust, so there is not a lot to worry about when blocking assets in someone’s favor.
Program provider uses line of credit to purchase and resell discounted bank instruments
First, the issuing bank sells the instrument directly to the program provider at a significant discount (ex. 60% of face value). After the program provider buys the instrument, they then sell it to their “commitment holder” (ex. 66% of face), who then sells it to their “commitment holder” for a higher price (ex. 72% of face). This continues until the “exit buyer” purchases it with the intent to hold the note to collect the coupon/interest, and the difference between the discounted note and its value at maturity. This is the basic idea of how yields are generated in private placement programs using bank instruments.
16. If I'm not the Client but am able to introduce you to a client, then am I an Intermediary or am I a Referral Source?
It’s important that everyone understands the difference between an intermediary and a referral source. To qualify as an Intermediary, you will have to play an active role in processing the transaction. That means educating the client or another intermediary so that everyone understands what is required and expected. It also includes being an active part of assisting in the preparation and/or review of the compliance package and facilitating the provision of additional documents or information. A Referral Source is someone who simply introduces two parties and is not actively involved in any transaction that ensues from that introduction. Referral sources are considered to have provided incidental assistance and will be paid a referral fee by the intermediary(ies) to whom their assistance was provided.
There is always one intermediary in every transaction - SRM Services. There may also be one or more intermediaryies between SRM Services and the client and one or more intermediaries between SRM Services and the program provider. The allocation of fees among the intermediaries in any transaction will be set forth in a Fee Agreement (IMFPA) signed by the Client.
IMPORTANT NOTICE:
PROGRAM ILLUSTRATIONS > Sample illustrations of funding programs that have been available recently
The private funding programs we illustrate on this website typically require no up-front fees. Whenever a program requires payments of any kind in advance, we advise clients to be extra careful in their due diligence efforts. That said, if a program requires up-front fees but exhibits proof of performance or has other features which reduce risk, it may still find a place on our website. Every program pays fees to the intermediaries who are responsible for introducing clients/investors to the program principals. These fees are typically paid on the yields produced by the funding program. If you are uncomfortable paying for services and information that benefit you, then we encourage you to move along to another website.
2. What is a Private Placement Program or a Secured Asset Management Program?
A private placement program or a secured asset management program is a program of managed transactions commonly used by the very wealthy where the principal investment is fully or substantially secured through structured mechanisms provided by the program’s bank or the program group.
3. What kind of assets may be eligible to go into a private placement program?
Although some private funding programs may have more flexibility, we represent that private placement programs can only be entered with clean, unencumbered cash funds owned by the client and over which the owner/participant has full control.
4. Is a program participant putting his principal at risk by entering a high yield secured asset management program?
There is little risk of a participant losing his principal investment. The program participation amount is fully or substantially secured through structured mechanisms provided by the program’s bank or the program group. These mechanisms provide that the participant’s funds cannot be moved, transferred, encumbered or withdrawn during the program term. Before entering any program, potential participant's should carefully review program contracts to ensure they are comfortable with any risks associated with that program.
5. What funds are actually traded in a secured asset management program?
After the participant’s funds are protected, the program directors will put up, through their own credit facilities, counterpart funds equivalent to the value of the participant’s funds. These are the funds that are utilized for program purposes.
6. What yields are given to private placement trade program participants?
By contract, the program directors may either specify a "best efforts" yield or a guaranteed yield to participants as well as the length of the program and timing of yield disbursements.
7. What factors can affect program structure and/or yield?
- How much is the Client placing into the trade?
- What is the bank in which the Client’s cash accounts are held?
- Where is the bank located?
- Does the Trader operate a trade desk in the depository bank?
- Is the Client ready, willing, and able to move his funds to the trade bank if a higher return is desired?
- Is the Client’s bank ready, willing and able to issue a block against the funds?
- What type of bank instrument will be placed into trade (BG, SBLC, MTN, CD)?
- Does the Client have an existing instrument or is the Client intending to procure an instrument to place into trade?
- What assets are backing the instrument?
- What bank issued/will issue the instrument?
- Is the issuing or depository bank ready, willing and able to issue a block against the instrument and/or transfer the instrument to the trade bank?
- Is the instrument owned or leased?
- If an instrument is leased, are all acquisition costs and interest paid?
- Does the Client intend to fund projects with the returns?
- What type of projects does the Client intend to fund?
- What is the total required by the Client to fund his projects?
- Are consultant commissions paid by deduction from the Client’s gross return or from Trader/Trade Platform earning?
- Is the program provider a Trader or a Trade Platform
8. What kind of transactions are done in a private placement program?
The transactions executed in these programs are the buying and selling of fully negotiable bank instruments. These instruments are delivered unencumbered, free and clear of all liens, claims or restrictions. The instruments are debt obligations of the top one hundred world banks in the form of medium term bank debentures of ten years in length. It must be stressed that, before an instrument is purchased, a contract is already in place for the resale of the bank debenture instrument. Consequently, the program’s funds are never put at risk.
9. What is the duration of these kinds of private programs?
Operations will take place approximately forty international banking weeks per year with specific transactions taking place approximately one or more times per week depending on circumstances. Although there are 52 weeks in a year, there are only 40 international banking weeks during which transactions take place. An international banking week is a full week which does not include an officially recognized holiday. This does not preclude, however, that transactions may occur on short weeks that have a holiday.
10. Why are these “high returns with safety” private programs not generally publicized?
- The answer is that these programs have been available, though not widely known, for years. However, because of the extremely high minimum requirements to enter them, only a few could qualify. The minimums traditionally have been $10 to $100 million dollars or more. Only recently have smaller minimums been available, allowing more participants to qualify and have the opportunity to earn exceptionally high and safe yields. Participants must be “invited” to engage in these very limited enrollment programs. Individual programs can quickly become filled and are then closed to further participation.
- The international trading of these banking instruments is a privileged and highly lucrative profit source for participating banks, and as a result, these opportunities are not generally shared with even their very wealthiest clients. It would be difficult, at best, to entice bank customers to purchase certificates of deposit yielding less than 3% if they were aware of the availability of other opportunities from the same institution yielding much higher rates of return.
- The banks always employ the strictest non-disclosure and non-circumvention clause in program contracts to ensure the confidentiality of the transactions. They are rigidly enforced, and this further accounts for the concealment of these programs from the general public. Participation is an insider privilege. As a result, virtually every contract involving one of these high-yield bank instruments contains explicit language forbidding the contracted parties from disclosing any aspect of the transactions for a period of five years.
- As a result, there is difficulty in locating experienced individuals whom are knowledgeable and willing to candidly discuss these opportunities and the high profitability associated with them without severely jeopardizing their ability to participate in further transactions.
11. How will the entire transaction become profitable?
- As is quite evident from the foregoing, the key to profitability of these bank instruments lies in having the contacts, the initial resources to purchase them at the level required by the issuing bank, and the necessary resources and contacts to negotiate the instruments to the most profitable level of the retail or secondary markets. As one might imagine, those contacts are most zealously guarded by those asset managers regularly and commercially involved with these instruments.
- As a result, the real secret of successful participation in private placement programs or secured asset management programs lies not in the how, why and wherefore of these transactions, but, and more importantly, in knowing and developing a strong working relationship with the program principals, bankers, lawyers and other specialized professionals who combine their skills and run these resources into lawful, secure and responsible programs with the maximum potential for safe yields.
12. Does the program adhere to generally accepted international business practices?
The truth is that there is no smoke and mirrors involved. All of the programs are conducted under the specific guidelines set up by the International Chamber of Commerce (ICC) known as ICC 500 . The ICC and your local Chamber of Commerce are not affiliated. The ICC is the regulatory body for the world’s great money center banks and is located in Paris, France. It has existed for more than 100 years, and exerts strict control on world banking procedures.
13. Can we participate in capital enhancement programs direct through the banking industry?
No. It should be pointed out that a few major U.S. banks do participate from within their banking operations based in Europe and the Far East, but they do not normally make their programs available to their customers. The chances are very great that your local branch manager has absolutely no knowledge of them, and may even deny their existence.The vast majority of U.S. citizens have not been made aware of the money making opportunities already available for fifty years to qualified European investors. The banks themselves are NOT allowed to take part in the management of these programs. This would lead to a massive cartel generating huge unregulated profits. The banks do, however, manage to make substantial profits from the program in the form of fees. Program management is the job of the non-bank private placement program providers.
14. What other opportunities are available to a qualified participant?
The providers themselves are also NOT allowed to transact or do business on their own behalf, so this presents an opportunity for qualified individuals to take part and to participate as the initiators of the various transactions. Initially, these privileged opportunities were not offered outside of the Western European markets, but as the world economy has continued to grow and more real money poured into the safety of West European markets they needed to put this capital to work earning profits. This allowed the door to be opened for the first time to American and Canadian participants and to provide them with a unique opportunity to accumulate capital in a confidential manner, and to decide for themselves how and where that capital will be disbursed. Recent restrictions put in place by the U.S. Government, however, have led many foreign banks to restrict U.S. citizens from participation in their trading opportunities as individuals. Sometimes U.S. citizens can overcome this restriction through a corporate entity participation.
15. What are the typical steps to private placement trade program success?
The client provides a proof of funds and passport copy along with their compliance package
Most of the assets that people try to apply with do not meet the criteria for secured asset management program. We represent that private placement transactions can only be done with clean, unencumbered cash funds owned by the client and over which the owner/participant has full control.
Program group submits application to the compliance department for review
Within hours, most program principals will know if the asset and owner are legitimate. Also at this time, the origin and history of the funds are examined to ensure that the funds are clean (i.e., without criminal background or involvement in money laundering, drug trafficking, terrorist activity and the like). In addition, if the client has over $100M, program groups typically either know of the applicant, or have seen the person try to apply before. There is a very small circle of real program providers, so when someone applies with large assets, the word gets around rather fast.
Client conducts “due diligence,” speaks with the program principal, and receives the contract
Most clients have never been involved with a private placement program before. Consequently, many will show the contract to their attorneys, who may advise against proceeding due to their lack of familiarity with secured asset management programs. Needless to say, this can kill the deal or, at the very least, make the potential participant feel uncomfortable. The problem at this stage is transparency and trust and due to the private nature of the secured asset management program business, there is only so much information the program principal can reveal—and this is a common obstacle that prevents some participants from proceeding.
Client signs the contract, and then the program principal countersigns it to make it official
If a client signs the contract and does not complete the transaction, they may be reported to the authorities, and by doing so, they will be permanently prevented from participating in any secured asset management program in the future. As we said before, there is a small circle of program providers, and if they label a potential client as a non-performer, it is rare that any other program provider will spend their time to work with them in the future.
Client contacts their bank to complete the private placement program transaction
Banks are in the business of making money, and customer requests are secondary to the profit of the bank. When a client asks to block, conditionally assign, or transfer their funds, they are cutting into the pockets of the bank. If the bank loses that asset, they actually lose up to 20x that amount in potential loans from their central bank (Federal Reserve). With this in mind, most banks stall with excuses since that will frustrate most customers enough to kill the transaction. Even though this may be an obstacle, this should never be a deal killer since it is the client’s money, not the bank's. To complete a deal, you either need a bull personality or a great relationship with the bank. Otherwise you may encounter problems with the final steps.
Client’s funds are blocked/reserved, conditionally assigned, or transferred to the program group in accordance with the contract
Very few program groups request that the client transfers ownership of their assets. If they do request this, be very cautious, and expect something is not as it seems. Most private placement program traders only need a conditional assignment of assets, temporary beneficiary access, or the blocking of the assets in their favor for the period of the trade. This allows them to access a line of credit based on those assets which they trade for the client as per their contract agreement.
Program provider accesses his bank's line of credit
The program provider is the only one who can access a line of credit against the client's blocked assets. The bank completes thorough due diligence on anyone it loans to, and when that loan involves millions of dollars, it is far more diligent. In short, no bank will offer a line of credit for millions to someone they do not thoroughly trust, so there is not a lot to worry about when blocking assets in someone’s favor.
Program provider uses line of credit to purchase and resell discounted bank instruments
First, the issuing bank sells the instrument directly to the program provider at a significant discount (ex. 60% of face value). After the program provider buys the instrument, they then sell it to their “commitment holder” (ex. 66% of face), who then sells it to their “commitment holder” for a higher price (ex. 72% of face). This continues until the “exit buyer” purchases it with the intent to hold the note to collect the coupon/interest, and the difference between the discounted note and its value at maturity. This is the basic idea of how yields are generated in private placement programs using bank instruments.
16. If I'm not the Client but am able to introduce you to a client, then am I an Intermediary or am I a Referral Source?
It’s important that everyone understands the difference between an intermediary and a referral source. To qualify as an Intermediary, you will have to play an active role in processing the transaction. That means educating the client or another intermediary so that everyone understands what is required and expected. It also includes being an active part of assisting in the preparation and/or review of the compliance package and facilitating the provision of additional documents or information. A Referral Source is someone who simply introduces two parties and is not actively involved in any transaction that ensues from that introduction. Referral sources are considered to have provided incidental assistance and will be paid a referral fee by the intermediary(ies) to whom their assistance was provided.
There is always one intermediary in every transaction - SRM Services. There may also be one or more intermediaryies between SRM Services and the client and one or more intermediaries between SRM Services and the program provider. The allocation of fees among the intermediaries in any transaction will be set forth in a Fee Agreement (IMFPA) signed by the Client.
IMPORTANT NOTICE:
- The answers above pertain primarily to large private placement programs available only to very wealthy parties. They have been included here to provide a larger context for the smaller private programs. That said, much of the information above is applicable to smaller programs.
- Our provision of information regarding secured asset management programs and the programs that we illustrate is not a solicitation for anyone to participate in these programs. This information is strictly for clients and their agents who contact us directly for these services. We do not advertise or solicit for customers or function as a broker, dealer or investment adviser.
- Potential program participants must always obtain specific answers to their questions directly from the principals of any private program that they are evaluating.
PROGRAM ILLUSTRATIONS > Sample illustrations of funding programs that have been available recently
Persistently small private placement program investors look for new secured asset management program information. Enjoy a small cap private placement platform report and other information on what is private asset management program project funding by locating it on SmallCapitalTrade.com. Fundamentals to help you find a private placement program trader or consider a fully managed secured asset management program capital enhancement opportunity are disclosed on this website.
Inform yourself on low-entry private placement program investment and on high yield buy/sell program transactions. Then decide if you want to participate in a private placement platform group or investigate a transparent buy/sell trade program group. Locating a proven private placement program manager that provides secured buy/sell trade platform principal should be one of your top concerns.
Disclaimer #6: This information it is not intended for the general public and all materials are for your PRIVATE USE ONLY. Intermediaries are NOT advisers of any kind. We are business consultants providing business information to private individuals and private companies. See all Disclaimers.
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