Private placement trading programs usually involves trading with medium term bank notes (MTNs) or Treasury Bills called T-Bills. Private placement programs provide traders with fresh cut issues of MTNs, BGs or T-Bills that produce significant profits. This is the first tier. They go in cycles and each time they sell for more and more. For example, I run a wholesalers selling something that's very difficult to obtain. I sell the product to a wholsaler and agree a percentage each time he sells it on and as it goes from one wholesaler to another it increases in value and once it reaches the end retail client it's at its highest.
PPP refers specifically to private placement trading programs with a high return on the investment associated with humanitarian project funding programs or Fed programs as compared to capital enhancement programs.
Only a few select number of high level traders have acces to these programs. Traders like European banks better then US banks as the leverages are 20:1 and in the US it's normally 10:1. Traders prefer Euro banks for a number of reason not just becasue they are more lucrative.
These programs provide the traders with fresh issues of MTNs or T-Bills that produce high profit margins. This is known as the first tier. In the commercial world this would be called the B2B wholesale market. Now we all know that end users usually do not have access to the prices offered in the wholesale market, so they buy goods in the convenience store and not direct from the producer.
Most of the time these programs require the investors to use a portion of their earnings for projects of humanitarian, social, or economic development in nature to make sure that part of these Profits are put back into the economy.
Even after deducting the portion of earnings to be used for projects, the investor is still left with a very substantial profit for their own investments.
Performing PPP programs are difficult to find and are not always available. Only a very restricted number of high-level traders can get access to these type of programs.
Many capable investors have been looking around for PPP for years and are unable to find a performing provider. Often they have wasted large sums of money by sending MT760's to banks and so called traders that simply cannot perform.
Genuine programs are without risk to the investor what so ever, as the credit line raised against the capital is underwritten by the trading group. The (Investor) therefore is involved for the purpose of audit only, as it is by law that Financial institutions are not allowed to participate and therefore have to find a Private entity either a private person or company. At no time are the investor’s or better called Audit Fund Provider’s funds used for the trade.
Usually, a trading program is nothing other than a pre-arranged buy-sell transaction of discounted banking instruments made as an arbitrage transaction. Virtually, an investor with large amounts of funds (on the level of 100M-1B USD) could arrange for this own program by implementing for himself the buy-sell transaction, but in this case he needs to gain control of the whole process, making contract with the Provider banks for the bank instruments and at the same time for the exit buyers. This is not a simple task at all considering that there are many FED restrictions to be passed, and at the same time, it is very difficult to get the strong necessary connections with the related parties (the issuing banks/providers for the bank instruments and the exit-buyers).
For an investor, it is much simpler (and usually more profitable) to enter a program where the Trader with his Trading Group has already everything in place (the issuing banks, the exit-buyer, the contracts ready for the arbitrage transaction, the line of credit with the trading banks, all of the necessary guarantees/safety for the investor, etc.) and the investor needs only to agree with the contract proposed by the Trader, forgetting about any other underlying problem.
The procedures to enter are simple and fairly standard, however the Audit Fund Provider will have to adhere to strict compliance and non-disclosure. Many claim to be next to traders, this is 99.99% not the case. Traders are very busy people and have no time to sit down and have a chat. Therefore they have a structure in place where the first contact is with a compliance officer who will go through the submission papers and sort out the good from the nonsense.
Private placement programs are very dificult to find and contrary to what you may believe, not many people have access to them and this doesn't reflect the number of people offering private placements on the net.
Outline of a successful private placement platform transaction
The current popularity of Private Placement Programs has led to the quite a bit of misinformation and fraud in the industry. The following is a brief outline of the steps necessary to close a transaction and is meant for informational purposes only.
1. A client must first submit CIS with POF to the platform, thereby allowing the private placement platform to assess the asset to be used (liquid cash, medium term not (MTN), bank guarantee (BG), precious gems) and validity of the client.
2. A compliance process follows which involves a more in depth due diligence process to verify the character and validity of the high net worth individual
3. Once a client has passed compliance of the private placement platform, the contract is designed, signed, and countersigned.
4. Next the bank is notified of the transaction and a line of credit is drawn by the trader upon the asset for funds to purchase bank instruments for trade
5. Profits are used mainly for humanitarian and large commercial real estate projects as they come in. A smaller portion (20-30%) is set aside for administrative use.
6. There are never any upfront fees for this to take place. Finally, the client may wish to reenter the program depending on the state or number of projects.
Before we get to the answer, let’s define the term “private placement program”. Though there are a number of different types of investments that are referred to as “private placement”, such as pre-IPO funding, managed Forex, equity investing, or organized investment pools, we are referring to the process of trading discounted bank instruments (MTN’s, BG’s) to generate high profits.
This is a niche that has flooded with potential clients lately, but the question is, are any of these clients ever successful?
This is a question we get every day from people who are new to the private placement business. Most of the people we speak to are just beginning to do their research, and want to make sure they are not wasting their time with something that’s “too good to be true”.
When you go to government fraud prevention sites, they say that private placement programs don’t exist, but when you read forums and speak to the brokers and traders, they say they do. Who is really disclosing the full truth? Well, let’s take a look at the incentives behind each of their claims.
The brokers are convinced private placement exists, but then again, they are the ones in line to get “huge commissions” on transactions.
The regulatory agencies swear private placement doesn’t exist, but then again, if they openly supported it, the equity and traditional investment markets would collapse, and fraud would rise in the private markets.
When you look at it, they both have strong motives for each of their positions, but there is only 1 truth…
The fact is, private placement programs are REAL and DO EXIST. The problem is, they are extremely tough to screen, and even harder to succeed with. Over the last 10 years the once unknown private placement business has spread all over the internet, which has lead to a flood of inexperienced brokers into the market. When you combine the recent increase in participation, with private nature of these programs, it can be a recipe for disaster if you are not properly informed.
We are not writing this article to state an opinion, but rather to state fact. Our sources have closed a private placement transaction, and we can confirm they do exist. The only thing to remember is this, it took them over 7 years, and thousands of contacts to find one program that performed. They literally contacted over 25,000 people who were in the business, and now we work with less than 10. In short, think of this as a search to find a needle in 100 haystacks, not as a path to immediate wealth.
For more information, please read our other articles to learn more of our inside tips and experience with Private Placement Programs, Bank Instruments, and all of the other Alternative Investment Markets.
This is a niche that has flooded with potential clients lately, but the question is, are any of these clients ever successful?
This is a question we get every day from people who are new to the private placement business. Most of the people we speak to are just beginning to do their research, and want to make sure they are not wasting their time with something that’s “too good to be true”.
When you go to government fraud prevention sites, they say that private placement programs don’t exist, but when you read forums and speak to the brokers and traders, they say they do. Who is really disclosing the full truth? Well, let’s take a look at the incentives behind each of their claims.
The brokers are convinced private placement exists, but then again, they are the ones in line to get “huge commissions” on transactions.
The regulatory agencies swear private placement doesn’t exist, but then again, if they openly supported it, the equity and traditional investment markets would collapse, and fraud would rise in the private markets.
When you look at it, they both have strong motives for each of their positions, but there is only 1 truth…
The fact is, private placement programs are REAL and DO EXIST. The problem is, they are extremely tough to screen, and even harder to succeed with. Over the last 10 years the once unknown private placement business has spread all over the internet, which has lead to a flood of inexperienced brokers into the market. When you combine the recent increase in participation, with private nature of these programs, it can be a recipe for disaster if you are not properly informed.
We are not writing this article to state an opinion, but rather to state fact. Our sources have closed a private placement transaction, and we can confirm they do exist. The only thing to remember is this, it took them over 7 years, and thousands of contacts to find one program that performed. They literally contacted over 25,000 people who were in the business, and now we work with less than 10. In short, think of this as a search to find a needle in 100 haystacks, not as a path to immediate wealth.
For more information, please read our other articles to learn more of our inside tips and experience with Private Placement Programs, Bank Instruments, and all of the other Alternative Investment Markets.
