The life-cycle of duETS represents an innovative approach to real estate investing
- duETS are issued in pairs by the Global Index Group Real Estate Trust (the Trust). For each pair of duETS an Authorized duETS Creator (AdC) exchanges cash for securities, depositing cash and/or Treasuries into the Trust and receiving an appropriate and equal number of Down and Up Securities.
- The Trust holds the assets in cash or Treasuries; these assets fully collateralize the securities, minimizing counterparty risk. Income from the Treasuries is included in the New Asset Value (NAV) of each pair of duETS. Trust assets are subject to annual asset management fee of 0.85%, accrued daily by the Fund Administrators.
- Once AdCs hold duETS, the secondary market begins. Market Makers will trade Downs and Ups in the same way they trade other securities, seeking to capture the bid/ask spread as revenue. Brokers such as CBRE Capital will facilitate secondary market transactions between interested Qualified Institutional Buyers and off-shore investors. The duETS’ Fund Administrator will calculate and provide the daily NAV for all duETS to facilitate secondary market trading.
- At the end of the Measurement Period, the securities will be valued based on the performance of the index. Gains in one share will be mirrored by the losses in the other. The value of the Ups cannot be more than the value of the Treasuries held in the Trust or less than zero. Downs have the same cap and floor. When the Measurement Period ends, investors can redeem shares for the calculated portion of NAV or roll over into a new Measurement Period.
Net Asset Value distribution is distributed between Down and Up Securities based on the percentage change in the reference index.
Different indexes, different measurement periods, and even different multipliers make duETS a flexible tool with unmatched ability to bring liquidity to illiquid asset classes. GIG has the capability of launching duETS on any index in the NCREIF family.