What happens when a team already expert in, and respected for, traditional investment management in the real estate market creates new coins backed by those assets. The world is about to find out!
In this episode, Barry E James talks to Lior Abehassera, Co-Founder and Head of Investor Relations, and David Dahan, Chief Investment Officer Real Estate, about how they came to this point, and where this is all going in the future.
With a combined background in investment banking, equity derivatives, financial engineering for major banks and real estate investment, three friends decided to investigate the world of cryptocurrency and see whether it could be brought into the traditional investment arena.
Very soon they realised that if the result was to become mainstream, to become something people used on a day-to-day basis, they would have to minimise the challenge of volatility.
The result - Leaseum, a kind of a Bitcoin but asset-backed - and an asset potential investors would understand.
Real estate is something pretty much everyone ‘gets’. People are already active, or passive, investors in this market just by buying their own home. So this asset class is ideal for any investor, not just the sophisticated; and it is also probably the biggest investable asset class on the planet.
So Team Leaseum decided to create a commercial real estate fund in the US, the world’s biggest market, and added a blockchain layer on the top to bring liquidity to a traditionally slow-moving process. After all, property bought even directly cannot currently be bought and sold overnight. But tokenisation will mean you will be able to invest in tokens, not a share of the fund.
By breaking down the asset into fractions among a wider audience, investment is possible from as low as $1k, and dividends will be paid out of the incoming rents. Meanwhile up to 15% will retained in a separate fund that can buy back discounted tokens should the market suddenly plummet. And, equally, should the value of tokens go through the roof, new tokens with a value higher than that of the property will be released, controlling the market cap.
As a security token Leaseum has worked from the outset with a bank of advisers - legal, financial, tax - and will be able to see who owns tokens at any time via the blockchain layer which will have whitelisting information built in to the smart contract.
Should the SEC come knocking, even they ought to be satisfied with transparency and control mechanisms like this.
So this is ready to rumble and should be simple to launch, right? The biggest challenge the team now faces is to get listed at all - at the time of the interview several platforms are close, but not yet ready, to launch token exchange platforms. This is something that will surely change over coming days and weeks, including friends of ICOrad.io, the Gibraltar Blockchain Exchange.
Leaseaum has just launched its private sale and plans its full token launch in the summer, targeting its private sale at investors of $100k or more. And as the asset is so readily understood they can offer sale to those looking for long-term and short-term investments, high net worth individuals, institutional investors - even one day insurance and pension investors, which they believe could be less than two years away.
· Basing the cryptocurrency on an asset, there is always a known value - this time in bricks and mortar.
· The US is the largest real estate market in the world.
· Making the asset readily-understood cuts out one layer of concern about volatility.
· The team is already expert in, and respected for, traditional investment management and the real estate market.
· By building whitelisting information into the smart contract, everything remains traceable and visible, even if tokens are traded by trusted third parties.
· Enquiries are already coming in from jurisdictions outside the US. This way at least investors from other locations can invest in US properties - this may be rolled out to property in other regions in the future.
· There is a need for secure exchange platforms as soon as possible.
· This is the future of investment for institutional, pension and insurance investors, as well as individuals around the world.