Product to separate the equity and dividend components of a stock and pass-through voting rights
NEW YORK & SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Permuto Capital LLC (Permuto), a joint venture between 3V Capital Partners SE LLC (3V Capital Partners) and Chia Network Inc. (Chia), today announced that a new voting trust investment vehicle (Trust) formed by Permuto has filed a registration statement with the Securities and Exchange Commission (SEC) relating to a proposed public offering of a new type of equity product. Permuto will act as the trust administrator of the Trust.
The product will consist of certificates issued by the Trust, which is formed solely to hold a single class of stock of a specified publicly traded company. This first Trust will be established to hold shares of common stock of Microsoft Corporation (NASDAQ: MSFT).
The certificates will consist of “dividend certificates” and “appreciation certificates” that represent the dividend portion and the capital appreciation portion, respectively, of the underlying stock. The two types of certificates would not be attached or stapled together, and are expected to trade separately, so that a holder could choose to hold one type of certificate or both types of certificates. It is expected that holders of certificates will have the ability to choose whether to hold, and trade, their certificates through either the facilities of The Depository Trust Company or the Chia blockchain.
“Permuto will enable investors to obtain direct exposure to the capital appreciation and dividend components of public equities,” said Trent Martensen, Co-CEO Permuto Capital. “We want to give all investors–from the largest financial institutions to individual investors–access to innovative assets that enhance the flexibility and granularity of their investment strategies without taking on unnecessary risks.”
Permuto also intends to apply to have both the dividend certificates and the appreciation certificates listed on a nationally recognized stock exchange.
Holders of certificates will have the right to instruct the trust administrator as to how to vote the underlying stock on each matter submitted to shareholders of the subject corporation, with each certificate type’s proportionate vote based on the relative trading prices of the certificates over a specified period.
“Chia blockchain technology is the linchpin to drive the increased value and efficiency for these assets,” said Gene Hoffman, Co-CEO of Permuto Capital and CEO of Chia Network. “Permuto’s offering lowers operational costs, simplifies administration, and passes fee efficiencies back to the investors, while enabling an unmatched and highly efficient vehicle for unbundled value delivery in One Market–a more frictionless and trustless market that trades 24 hours a day, 7 days a week.”
The Trust will not receive any cash proceeds from the issuance of the certificates. The certificates will be created by the Trust and initially issued to holders in exchange for those holders depositing with a custodian, on behalf of the Trust, shares of the underlying stock. Holders will receive one dividend certificate and one appreciation certificate in exchange for depositing one share of the underlying stock. Permuto currently plans to limit the Trust’s holdings to no more than 10% of the outstanding shares of the underlying stock.
Only “eligible holders” (defined as “qualified institutional buyers” or “accredited investors” that meet certain requirements) will be able to deposit shares of the underlying stock into the Trust and initially receive certificates. However, the ability to acquire certificates after initial issuance in the secondary market will be available to all investors.
The certificates do not have a fixed maturity date. However, eligible holders will have the right to redeem one dividend certificate and one appreciation certificate in exchange for one share of the underlying stock held by the Trust, subject to the satisfaction of certain requirements.
Permuto, as the trust administrator, will receive a transaction fee upon deposits and redemptions from the Trust, and a fee based on a percentage of distributions made by the Trust to the dividend certificates, but will not receive any fees based on the assets of the Trust.
The proposed offering will be made only by means of a prospectus. Copies of the preliminary prospectus related to this offering, when available, may be obtained by email at info@permuto.capital.
A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or other terms of the offering.
About Permuto Capital
Permuto, based in New York City and South San Francisco, is dedicated to advancing innovative financial solutions for institutional and retail investors. With a commitment to integrity and strategic growth, we aim to drive progress in an ever-evolving marketplace. For more information on Permuto, visit www.permuto.capital.
About 3V Capital Partners SE LLC
3V Capital Partners focuses on the democratization of innovative financial solutions that were traditionally only offered to qualified institutional buyers and carried significant fee drag. 3V Capital Partners utilizes cutting edge technology and rigid risk management standards to ensure our products carry the lowest possible fee for investors and minimize counterparty risk. Founded by a team of technology-focused investment bankers, the firm seeks to innovate financial markets and enable investors to better manage risk and customize exposure to public securities.
About Chia Network Inc
Chia Network delivers software to enable enterprises to tokenize, custody, and trade any asset, while ensuring auditable authenticity and provenance. Created by Bram Cohen, the inventor of BitTorrent, the underlying open source, public Chia blockchain provides the secure and regulatory-compliant infrastructure for One Market.
Contacts
FTI Consulting
Dan Margolis and Brian Waldman
E: Chia@FTIconsulting.com