May 13th, 2020
By Jeffrey Sweeney, Chairman and CEO at US Capital Global
We have mentioned several times that social separation, either voluntary or imposed, can have beneficial effects. We cited examples of historical leaders, religious and otherwise, who unquestionably were empowered by taking time to themselves. In our case, there has been time to realize how grateful we are for the group of friends and colleagues we have assembled here at US Capital Global, as well as for our close network of associates. Our shared values are really what bring us together and hold us together. They are not complicated. Primarily they center around ahimsa, the goal of minimizing suffering, and gratitude, acknowledging we are thankful for what we have and who has provided that.
For example, most in our company advocate and subscribe to a plant-based diet, some for their health, but most because we are not comfortable with animals suffering unnecessarily when there are plenty of alternative foods available. We also maintain respect for others with opposing views, whether on plant-based diets or politics. Being able to freely share ideas and beliefs is important here. I believe I can speak for most of our associates and say we are quite grateful for what we have and have been provided. For some, this manifests as some spiritual belief, for others a gratefulness for what we have. For instance, there is a collective desire to preserve and improve the environment, rather than merely exploit it.
As a company, in our own transactions and circumstances we shy away from opportunities that do not align with our shared values. We don’t criticize those that do, but just make an effort to avoid what we call negative impact opportunities. Regarding our credit products, on many occasions I have stated that we don’t take over businesses as a business model in our lending structures. It is a legitimate business strategy and I don’t criticize those who operate in that mode, but we prefer to do everything possible to work with our clients for a successful outcome even if we have the security of a change of control (to us) as an option in the event of problems.
There is increasing interest in alternative fixed-income products from investment advisors and investors, as they are not correlated with public securities. Our fixed-income investment vehicle, US Capital Global Lending, LLC, has generated a net rate of return of 8% per annum, paid on a quarterly basis, since inception on secured, non-real estate correlated loans. Past performance is no assurance of future returns. Our underlying business borrowers must be able to pay current interest as well as have assets enough to cover our loan in the event of liquidation. The security often has a stock pledge from the principals as collateral in addition to business assets. Protective covenants are important and selecting high-value assets and due diligence are intended to help protect shared outcomes.
Our client MIRIS AS in Norway, is launching their convertible note investment product there this quarter. We intend to launch a feeder SPV for US investors this quarter as well. You will see MIRIS is focused on fully sustainable, green real estate projects that are green-bond certified. Their marquee project is the Svart Hotel at the Arctic circle built on a glacial lake. Designed to be energy positive and hyper environmentally friendly, even during construction, MIRIS has built construction management software to manage the project for green building and will be offering the SaaS to other developers worldwide. We very pleased to be associated with MIRIS as they exemplify our environmental and social values.
Takeout Group, has what we see, as a restaurant friendly delivery SaaS option, quite different from the existing service providers in the market place. Ulrich, a co-founder, shared with me this week that his sales are up in April and they are seeing growth from both the move to increased takeaway food as well as their business model’s focus on helping restaurants grow their customer base and deepen their relationship with their customers who order take out. Whether it’s green buildings or innovative delivery services, many of our investment opportunities illustrate our shared values.
The Rise of the Digital Platform
EQIBank is a Caribbean regulated integrated digital banking platform. EQITrade, their parent company, just launched their client onboarding software. We were on a demonstration of the software this week and I liked the elegant nature of the UI for financial client onboarding. It looked very useful and user friendly for both the financial entity administrator and the client. They have a back log of customers for account openings and this is intended to speed the process for vetting international clients and international business entities wishing to transact using their bank services for deposits and custody of both fiat and digital assets.
US Capital Global, through its broker-dealer affiliate US Capital Global Securities, LLC, has utilized the latest changes in security offering regulations for over 5 years to enable us to offer and advertise securities through our online platform. Due to the current pandemic we are seeing a dramatic interest in the independent broker-dealer and financial advisor networks: retail broker dealers, transfer agents, and registered investment advisors scrambling to adopt a digital platform presence for alternative investment subscriptions and trades. Unable to distribute alternative investments in traditional face-to-face or event-driven channels, they are now embracing digital platforms and display methods for garnering interest and attention for alternative investments. Further pressure to adopt more contemporary digital distribution methods is fueled by what we see as robust increase in demand for investments in alternative fixed-income securities. Between increased demand and disruption in traditional sales channels, look for more digital platforms for regulated advisors to select investments for their clients. But the key is the value of the assets on the platform, and the professionals in the ecosystem, not just the technology. Further reinforcing and unleashing our values of gratitude of valuable deep relationships that enable tech innovation and access to wealth creation, all intended for profitable impact investing.
Securities offered through US Capital Global Securities LLC (“USCGS”), a SEC Registered Broker Dealer and member of FINRA and SIPC. The information has been obtained from the company referenced and does not purport to be complete. This does not constitute a solicitation of an offer to purchase any security. Any such offer or solicitation shall be made only pursuant to the offering documents, operating agreement, subscription agreement, and other definitive documentation. USCGS or its affiliates may provide advice to, be compensated by, or may from time to time acquire, hold or sell a position in the securities of the companies noted herein. 112005A