Synthetic fixed income principal protected vehicle and methodology

• US 8,234,199 B2
• Filed: 04/05/2002
• Issued: 07/31/2012
• Est. Priority Date: 04/06/2001
• Status: Active Grant

• Current Assignee: Mary Rose Mistretta
• Original Assignee: Mark J. Mistretta
• Inventors: Mistretta, Mark J.
• Primary Examiner(s): Kazimi, Hani M
• Assistant Examiner(s): ONYEZIA, CHUKS N
• Application Number:
  US10/117,431
• Publication Number:
  US 20020174046A1
• Time in Patent Office: 3,770 Days
• Field of Search: 705/35
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Methods and systems are provided for structuring and investing in a single investment vehicle that combines a guarantee of a predetermined percentage of principal along with a potential for returns historically associated with high risk equity investments. Methods and systems of the invention are useful for allocating investments to provide potentially high yields while preserving a guaranteed amount of principal over a predetermined investment period. Methods of the invention are also useful for providing institutional investors with a return driven investment vehicle that also provides access to principal during an investment period in order to meet pre-existing or continuing financial obligations.

Claims

1. A computer-implemented method for each of a plurality of investors to participate in a managed investment pool provided by an investment vehicle while retaining an investor-specified guarantee of principal over the life of the investment vehicle, the method comprising:

a) for each of a plurality of investors, inputting to a computer system information comprising;

a predetermined investment period corresponding to the life of the investment vehicle,

an investor-specified investment principal,

an investor-specified percentage of principal to be regenerated by a predetermined interest rate by the end of the predetermined investment period,

an optional investor-specified periodic payment,

b) inputting to the computer system a fixed interest rate available at the time of an investment and calculating, on a processor of the computer system, a first portion of the investment principal of each investor to be allocated to a guaranteed investment pool at the fixed interest rate for the duration of the investment period, wherein the first portion is calculated to be sufficient to regenerate the investor-specified percentage of principal by the end of the predetermined investment period, and wherein for each investor the first portion is less than the entire investor-specified investment principal such that a second portion remains for investment in a managed investment pool;

c) inputting to the computer system a selection of one or more asset classes for the second portion of the investment principal of each investor that is allocated to the managed investment pool;

d) calculating, on a processor of the computer system, a projected rate of return for each investor based on i) the percentage of principal that is to be regenerated from the first portion of the investment principal, and ii) the projected rate of return of the managed investment of the second portion of the investment principal;

e) providing an optional output of the projected rate of return calculated in d); and

,

f) storing, in the computer system memory, information relating to the predetermined investment period and, for each investor, the investor-specified parameters of a), the fixed interest rate of the guaranteed investment pool, the first portion of the investment principal calculated in step b) for allocation to the guaranteed investment pool, and the second portion of the investment principal that is allocated to the managed investment pool.

2. The method of claim 1, wherein the first portion is sufficient to regenerate 100% of the investment principal by the end of the investment period.

3. The method of claim 1, wherein the first portion is allocated to an instrument selected from the group consisting of a GIC, a treasury note, and a zero coupon bond.

4. The method of claim 1, wherein the first portion is allocated to an instrument that backed by at least one financial instrument selected from an A rated security, or above, a mortgage backed security, a corporate bond, a municipal bond, a U.S. Treasury bond or note, an index tied to U.S. bonds and notes, a GNMA, a FNMA, a Guaranteed Insurance Contract of 3 to 15 years, a collateralized mortgage obligation, a LIBOR-based investment of 5 to 15 year maturity, a financial guarantee insurance, a funding agreement, an annuity contract, a zero-coupon bond, and foreign equivalents thereof.

5. The method of claim 4, wherein the financial instrument is provided free of a sales commission.

6. The method of claim 1, wherein the managed investment comprises at least one of an investment in a private company, private equity, real estate, and venture capital.

7. The method of claim 1, wherein the managed investment comprises an investment in at least one class of investment selected from the group consisting of biotechnology, pharmaceutical, medical device, energy, and telecommunication investments, and publicly traded securities.

8. A computer system for allocating fixed amounts of principal for each of a plurality of investors into different investment pools for the duration of a predetermined investment period provided by an investment vehicle, the system comprising:

a) at least one input interface for inputting, for each of a plurality of investors, information comprising;

a predetermined investment period corresponding to the life of the investment vehicle

an investor-specified investment principal,

an investor-specified percentage of principal to be regenerated by a predetermined interest rate by the end of the predetermined investment period,

an optional investor-specified periodic payment,

a fixed interest rate that is available at the time of an investment, and

a selection of one or more asset classes that are available at the time of an investment;

b) at least one processor configured for calculating;

a first portion of the investment principal of each investor to be allocated to a guaranteed investment pool at the fixed interest rate for the duration of the investment period, wherein the first portion is calculated to be sufficient to regenerate the investor-specified percentage of principal by the end of the predetermined investment period, and wherein for each investor the first portion is less than the entire investor-specified investment principal such that a second portion remains for investment in a managed investment pool comprising the selection of one or more asset classes, and

a projected rate of return for each investor based on i) the percentage of principal that is to be regenerated from the first portion of the investment principal, and ii) the projected rate of return of the managed investment of the second portion of the investment principal; and

c) at least one memory for storing information relating to the predetermined investment period and, for each investor, one or more of the investor-specified parameters, fixed interest rate, and asset classes of a).