EXAMPLES OF SECURITIZATION
proprietary compartments
Private Equitam
Private Equitam is a compartment of Lake Wood S.A. with investments in the ‘Private Equity’ universe. In times of low interest rates, high stock prices and volatile commodity markets, Private Equity has developed not only as a real asset class, but also as a (partly) alternative for equity and other volatile investments.
The assets are mainly company and stock related (companies, company bonds/loans, financial derivatives), although some more liquid investments, including cash and monetary instruments, can be built into the compartment. The assets are linked to the ‘real economy’ and are in general of a more illiquid nature. They should be considered against a longer investment horizon (min. 5 years going up to 8 and even 10 years). These investments can have higher returns, whilst an a-symmetric distribution is being sought. More complex strategies, like ‘second line’ investments or ‘P2P asset-based loans’ (private debt) can be embedded in the compartment. Also, financial engineering and quantitative modelling can be used to seek higher yields.
Modulam
Modulam is a compartment that has been specializing in Structured Finance. It has been developing high complex instruments and products through a Modular structure.
Modular based structures are more efficient than most Structured Financed products as the assets and techniques used are kept as separate assets and techniques as much as possible. Therefore, more isolated risks (and other characteristics continue to exist and become easier to manage, hedge, change or sell. Profits are increasing as well, due to the more modular or flexible structure.
Modular Finance, a form of Structured Finance, developed by Patrick Le Juste in 2009, can be used in seeking higher returns, better ratios between performance and risk (skewness, kurtosis, Gauss/changed distribution), but even more for obtaining higher flexibility and liquidity in the taken positions. The ‘building blocks’ used to structure and build positions in this compartment of Lake Wood are being considered in their most original and straight form and not linked to each other or to the global instrument or product itself.
Tradiam
The capital invested will be used as part of currency trading operations in the short term (1 second to 1 day), in the middle long term (> 1 day to 1 month) and in the very long term (> 1 month to 1 year). Most of the trading and holding of positions (‘trend following’) will be done on the major currency pairs (EUR, USD, GBP, YEN, CHF as pairs). Trading and holding of longer-term positions can also be done in minor currencies, but this should not be the bulk of the transactions.
The trading will also include ‘Bullion trading’ (gold), as it is very closely related to currencies in different perspectives. Tradiam may also invest in other Forex and/or gold related instruments and products (swaps, options and other derivatives, funds in currencies and gold, structured notes with at least 1 currency as an asset embedded, etc.). In case clear and very interesting opportunities are being detected in other asset classes, Tradiam can decide to invest directly or indirectly into these instruments or products. For hedging purposes Tradiam can invest in other asset classes as well. Trading will mainly be done on technical analysis of the currency pairs, whilst economic and fundamental aspects will be used to support the decisions based on the technical analysis. Trading will mainly be done manually, but some investments can be made in own, inhouse-developed and/or third-party algorithms. It is possible that certain commercial transactions in Forex and gold are being redirected through Tradiam. This will only be allowed under certain conditions and under no circumstances can these deals lose money.
