Method of managing financial instruments, equipment lease derivatives and other collateral instruments, data architecture, application and process program

• US 7,739,180 B2
• Filed: 06/17/2002
• Issued: 06/15/2010
• Est. Priority Date: 06/19/2001
• Status: Active Grant

• Current Assignee: Digitech Information Systems Incorporated
• Original Assignee: Digitech Information Systems Incorporated
• Inventors: Deepak, Gulati, Beverly, Robert G.
• Primary Examiner(s): Trammell; James P
• Assistant Examiner(s): Liu; Marissa
• Application Number:
  US10/475,372
• Publication Number:
  US 20040148240A1
• Time in Patent Office: 2,920 Days
• Field of Search: 705 1- 45, 709/204, 709/200, 707/3, 707/27, 707/E17.014, 707/E17.044
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A computer-implemented process ad methodology that selects collateral instruments such as equipment leases, using mathematical models, based on selection criteria, risk-reward relationships, and maturity needs resulting in the creation of new financial instrument derivatives. These new derivatives allow for creation of secured private equity, public equity, mutual funds and venture capital funds where the investors'"'"' principal is safeguarded against loss regardless of the performance of the investments being made. A two-tier investment structure is created whereby the principal amounts from the fund are invested in specially identified high yield vehicles such as residual equipment leases with high yields over certain maturities. The high yield cash flow only is then invested in higher risk investments such as venture capital start-ups companies.

Claims

1. A method for selecting leases to optimize an investment portfolio comprising the steps of:

receiving data regarding an equipment purchase price, an equipment sale price, a number of units, a lease purchase price, a life of lease, a lease acquisition fee, an accelerated depreciation of change, and a yearly payment;

calculating by computer a total purchase price by adding the lease purchase price to the lease acquisition fee;

calculating by computer an accelerated depreciation result by multiplying the equipment purchase price by the number of units;

calculating by computer a rate of return by subtracting from the yearly payment the total purchase price and the accelerated depreciation result and dividing by the lease purchase price; and

selecting a lease based on the rate of return being greater or equal to a predetermined value and using the selected lease to create lease backed financial instrument derivatives and optimize the investment portfolio.

2. The method according to claim 1, further comprising the steps of

calculating a fair market value at the end of lease by multiplying the equipment sale price by the number of units;

calculating a residual at end of lease by subtracting 100 from the accelerated depreciation of change and multiplying by the equipment sale price and the number of units; and

calculating a straight line depreciation amount by subtracting the total purchase price from the fair market value at end of lease and dividing the result by the life of lease.

3. The method according to claim 2, further comprising the step of calculating a straight line depreciation result by multiplying the equipment purchase price by the number of units and adding the lease acquisition fee and subtracting the straight line depreciation amount.

4. The method according to claim 1, wherein the predetermined value is dependent on an investment grade rating of a type of instrument.

5. The method according to claim 4, wherein the type of instrument is one of venture capital, private equity, public equity, and/or debt instruments.

6. The method according to claim 5, further comprising the step of selecting the lease based on a length of the lease.

7. The method according to claim 1, wherein a plurality of leases are selected to create the lease backed financial instrument derivatives.

8. The method according to claim 7, wherein the investment structure is applied to a venture capital environment, private equity, public equity, and/or debt instruments.

9. The method according to claim 1, wherein a plurality of leases are selected to create a type of trading exchange.

10. An apparatus for facilitating a selection of leases to optimize an investment portfolio, comprising:

a storage device;

a processor connected to the storage device, the storage device storing a program for controlling the processor, wherein the processor operates with the program for receiving data regarding an equipment purchase price, an equipment sale price, a number of units, a lease purchase price, a life of lease, a lease acquisition fee, an accelerated depreciation of change, and a yearly payment;

calculating a total purchase price by adding the lease purchase price to the lease acquisition fee;

calculating an accelerated depreciation result by multiplying the individual purchase price by the number of units;

calculating a rate of return by subtracting from the yearly payment the total purchase price and the accelerated depreciation result and dividing by the lease purchase price; and

selecting a lease based on the rate of return being greater or equal to a predetermined value and using the selected lease to create lease backed financial instrument derivatives and optimize the investment portfolio.

11. The apparatus according to claim 10, wherein the processor further operates with the program for

calculating a fair market value at end of lease by multiplying the equipment sale price by the number of units;

calculating a residual at end of lease by subtracting 100 from the accelerated depreciation of change and multiplying by the equipment sale price and the number of units; and

calculating a straight line depreciation amount by subtracting the total purchase price from the fair market value at end of lease and dividing the result by the life of lease.

12. The apparatus according to claim 11, wherein the processor further operates with the program for calculating a straight line depreciation result by multiplying the equipment purchase price by the number of units and adding the lease acquisition fee and subtracting the straight line depreciation amount.

13. The apparatus according to claim 10, wherein the predetermined value is dependent on an investment grade rating of a type of instrument.

14. The apparatus according to claim 13, wherein the type of instrument is one of venture capital, private equity, public equity, and/or debt instruments.

15. The apparatus according to claim 14, wherein the processor further operates with the program for selecting the lease based on a length of the lease.

16. The apparatus according to claim 10, wherein a plurality of leases are selected to create the lease backed financial instrument derivatives.

17. The apparatus according to claim 16, wherein the investment structure is applied to a venture capital environment, private equity, public equity, and/or debt instruments.

18. The apparatus according to claim 10, wherein a plurality of leases are selected to create a type of trading exchange.