System and method for structuring and operating an investment vehicle

• US 20050251465A1
• Filed: 04/27/2005
• Published: 11/10/2005
• Est. Priority Date: 05/02/2004
• Status: Abandoned Application

• Current Assignee: Marshall & Ilsley Corporation (Bank of Montreal)
• Original Assignee: Marshall & Ilsley Corporation (Bank of Montreal)
• Inventors: Abitz, David, Brown, Daniel P., Schulz, David W.
• Application Number:
  US11/115,535
• Publication Number:
  US 20050251465A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and method of structuring and operating an investment vehicle is disclosed which structures the investment vehicle as a common trust fund which operates using the investment, trading, and timing strategies of a hedge fund. The investment vehicle is implemented using a common trust fund structure, which may be offered by a financial institution. The investment vehicle so operated by the financial institution using a hedging strategy to manage the property from the trust to achieve a strong return, even in adverse market conditions.

Claims

1. A method of structuring and operating an investment vehicle, comprising:

establishing a common trust fund for the collective investment of a plurality of investors at a financial institution which acts as the trustee of the common trust fund;

providing a trust agreement for investors to enter with the financial institution the trustee;

entering into at least one trust agreement between at least one investor and the financial institution as the trustee;

allowing the investor to invest capital into the common trust fund; and

actively managing the common trust fund using a hedging strategy to manage the common trust fund.

2. A method as defined in claim 1, further comprising:

periodically rebalancing the portfolios of the common trust fund.

3. A method as defined in claim 1, wherein the hedging strategy comprises:

a long-term portfolio; and

a short-term portfolio.

4. A method as defined in claim 3, wherein the long-term portfolio is constructed using statistical measures historically associated with rising values, and wherein the short-term portfolio is constructed using statistical measures associated with declining values.

5. A method as defined in claim 1, further comprising:

allowing the investor to add additional property to the established trust.

6. A method as defined in claim 1, further comprising:

allowing the investor to withdraw at least a portion of the property held by the established trust.

7. A method as defined in claim 1, further comprising:

allowing a money manager to manage the pooled properties of the common trust fund.

8. A method as defined in claim 1, wherein the trustee is compensated based upon an incentive-based fee.

9. A method of structuring and operating an investment vehicle, comprising:

establishing a common trust fund for the collective investment of a plurality of investors at a financial institution which acts as the trustee of the common trust fund;

providing a trust agreement for investors to enter with the financial institution as the trustee;

entering into at least one trust agreement between at least one investor and the financial institution as the trustee;

allowing the investor to invest capital into the common trust fund;

actively managing the common trust fund using a hedging strategy to manage the common trust fund;

periodically rebalancing the portfolios of the common trust fund;

providing means for investors to invest additional capital into the common trust fund; and

providing means for the investors to withdraw at least a portion of the investor'"'"'s capital held by the common trust fund.

10. A method as defined in claim 9, wherein the hedging strategy comprises:

a long-term portfolio; and

a short-term portfolio.

11. A method as defined in claim 10, wherein:

the long-term portfolio is constructed using statistical measures historically associated with rising values, and the short-term portfolio is constructed using statistical measures associated with declining values.

12. A method as defined in claim 9, further comprising:

allowing a money manager to manage the pooled properties of the common trust fund.

13. A method as defined in claim 9, wherein the trustee is compensated based on an incentive-based fee.

14. A method of structuring and operating an investment vehicle, comprising:

establishing a common trust fund for the collective investment of a plurality of investors at a financial institution which acts as the trustee of the common trust fund;

providing a trust agreement for investors to enter with the financial institution as the trustee;

establishing a trust based upon the trust agreement; and

actively managing the common trust fund using a hedging strategy to manage the property from the trust.

15. A method as defined in claim 14, wherein the hedging strategy pursues market level returns over longer periods of time, with a substantially market level of risk, as defined by the standard deviation of returns, and with a substantially low correlation to market returns.

16. A method of structuring and operating a common trust fund as a hedge fund, comprising:

establishing a common trust fund for the collective investment of a plurality of investors at a financial institution which acts as the trustee of the common trust fund;

executing a trust agreement to establish a trust, the trust agreement naming the financial institution as the trustee, the trust agreement having an investor;

adding capital obtained from the investor to the common trust fund; and

managing the common trust fund using a hedging strategy, the hedging strategy pursuing market level returns over longer periods of time, with a substantially market level of risk and with a substantially low correlation to market returns.