We specialize in
two different Private Placement structures: Private Investments
on Public Entities know as (PIPEs) and Collateralized Intellectual
Property Appreciation Rights, know as (CIPARs):
In our PIPE structure,
we are currently raising capital for a number of very exciting
companies, primarily in the technology and healthcare sectors.
We are able to raise capital from both domestic and international
sources for public and private companies in the equity and
debt markets. Because we remain opportunistic and flexible
to the ever changing capital markets, deal structures can
include: common or preferred equity, convertible debentures,
equity lines, bridge loans as well as subordinate and senior
debt. This growing business complements MAGNA's core trading
operations.
CIPARs are senior secured debt instruments
with high current coupons which also allow the investor to
participate in an ongoing royalty stream from license agreements
with Fortune 1000 companies. Thus CIPARs generate private
equity returns and have downside protection due to the full
collateralization of the notes. This high alpha product takes
advantage of the pricing inefficiencies of patents and offers
participation in an asset class which until now was untapped.
Typical transactions have a loan to value of 25%, coupons
in the 12-16% range complemented by participation rights to
royalties generated by the license agreement. The term of
the note is typically 48 months, with interest paid quarterly.
Unlike a private equity investment, the investor in a CIPAR
receives; a high current coupon, additional return on capital
through royalty participation rights, and a day-certain return
of capital in about half the time of a typical private equity
investment. |