Distributions are payments from the company to its shareholders. Depending on the type of company, the distribution may have different names. Distribution is the generic term for the part of a company's profit that is paid to the shareholders. In the case of public limited companies, this is also referred to as the dividend.
Alternative investment funds (AIF) are financial investments that do not rely on traditional financial products such as shares, bonds, listed investment funds or other securities traded on the stock exchange. The range of alternative investments extends from noble cars and precious metals to forest land, real estate, works of art and wines. The best-known alternative investments are hedge funds and investments in the private equity sector. Real estate counts as an alternative investment if investors invest with a return objective - meaning that a real estate acquisition for personal gain is not called an AIF. This can be a direct investment or the acquisition of a fund participation. AIFs are intended for investors who want to invest their money for the long term. Depending on the product, the terms are a few years, but can also be considerably longer.
As an independent institution under public law, BaFin (the Federal Financial Supervisory Authority) is the supreme federal authority and financial supervisor of all service providers in the German financial sector. In its function as the competent supervisory authority, BaFin monitors transactions and business processes within the financial markets. As a state authority, the Federal Financial Supervisory Authority is subject to the legal and technical supervision of the Federal Ministry of Finance. BaFin is represented by a board of directors as the management level with overall responsibility and finances its budget from fixed fees as well as levies on the institutions and companies to be supervised. The main focus of its activities is the conscientious and complete control and supervision of all areas of finance in the Federal Republic of Germany, such as banks, insurance companies, pension funds and other integrated securities trading.
An equity loan is a special type of loan. In this case, an investor participates in the turnover or profit of a company for which he has made a purposeful capital investment. While interest may also be paid, it must play a subordinate role or necessarily be profit-oriented.
Creditworthiness refers to the ability and willingness of a debtor to meet future payment obligations on time and in full. The term creditworthiness is often used in connection with the granting of a loan, because banks only grant a loan to customers who have a sufficient credit rating. Internet shops or mail-order companies also often check the creditworthiness of customers in advance before the goods are shipped. Thus, creditworthiness basically means the ability to pay and creditworthiness.
Investment crowdfunding is a way of raising money for a business or venture by having a large number of backers invest a relatively small amount.
Diversification is a risk management strategy that mixes a variety of investments in a portfolio. A diversified portfolio contains a mix of different types of assets and investment types to limit the default risk of any single asset. The basic idea behind diversification is that a portfolio constructed from different types of assets will, on average, generate higher long-term returns and reduce the risk of any single stock or security.
Dividends arise when an investor becomes a co-owner of a company by purchasing shares. In return, the shareholders participate in the success, i.e. the profit of the company. This payment is called a dividend, which is usually distributed once a year.
Equity is that portion of the capital that belongs to the owners of a company. The share that has not been financed by loans or other monetary transactions. The capital is available to the company for an unlimited period and is also not subject to any repayment obligation. The counterpart to equity capital is debt capital. Equity and debt capital together represent the total capital of the company.
The issuer is the person who issues securities. In the case of shares, the company behind the share is therefore the issuer, while in the case of bonds, a company, a public corporation, the state or other institutions can act as the issuer. In our case, tokenstreet is the issuer behind the investment opportunities offered.
Incidental acquisition costs are all costs that are directly related to the acquisition of a property. A distinction is made between the fixed ancillary costs of an acquisition, which offer little potential for savings, and the variable ancillary costs, which are charged individually. In a traditional property purchase, these costs can amount to up to 15% of the purchase price.
An Exchange Traded Fund (ETF) is an exchange-traded index fund that tracks the performance of an index, such as the DAX. An ETF allows someone to invest in entire markets with one security at a low cost. In addition to shares, you can also invest in many other asset classes with ETFs. ETFs basically replicate a market index one-to-one and - like a share - can be traded on the stock exchange at any time.
Family offices manage the assets of one or more wealthy families. Their goal is to preserve and also increase the family's assets. In a family office, experts develop appropriate strategies and ensure that the assets of the respective family are invested in a legally secure manner.
Debt capital is what is not due to the owners of a company. It is the term for the debts of the company shown in the balance sheet (liabilities and provisions) that have been caused legally or economically. A basic distinction is made between short-term, medium-term and long-term debt capital. The opposite of debt capital is so-called equity capital. Equity and debt together represent the total capital of the company.In the balance sheet, debt capital is shown on the liabilities side. It includes both liabilities and provisions.
A closed-end fund or closed-end investment fund is an investment fund in which a fixed number of investment certificates or a fixed amount of capital is raised without the possibility of returning fund units to the fund itself.
Hedge funds are a special type of investment fund and pursue a very speculative investment strategy with the aim of generating the highest possible return. Investors in hedge funds thus run an increased risk of a complete loss of capital. For this reason, hedge funds were originally not created for private investors, but for institutional investors. Their aim was to hedge equity transactions against risks - such as a negative market development. To do this, they form investment strategies with the help of various financial mathematical methods and put together a comprehensive portfolio of share purchases or options. In most cases, these are so-called short sales, in which the hedge fund managers bet on rising or falling prices.
In securities law and investor protection, a distinction is made between the private investor and the institutional investor. Private investors are predominantly natural persons, while institutional investors belong to the corporate sector. This classification has legal consequences with regard to investment advice.
IRR is the abbreviation for Internal Rate of Return. It refers to the internal rate of return for investments. In German, the valuation method is also called IZF. The internal rate of return is an important key figure in financial mathematics. The internal rate of return is used to calculate the average annual return on investments or capital investments that provide irregular and fluctuating returns. Accordingly, the internal rate of return is often used in everyday business management. The internal rate of return method was originally developed to determine the profitability of investment or capital investment decisions. On the basis of the internal rate of return, a company can compare different investments and capital investments and decide which alternative is most advantageous for the business activity.
In finance, term refers to the contractually agreed period of time until the maturity of a loan or the duration of a profitable financial investment.
Mezzanine capital is a collective term for several types of financing. It is a hybrid form of equity capital and debt capital. The financing instruments used for this purpose, also referred to as hybrid financing instruments, include profit participation rights, participating loans or dormant equity holdings. Depending on which financing instrument is used, the mixed character of mezzanine capital can be classified as either close to equity or close to debt capital.Four characteristics distinguish mezzanine capital:
1. repayment obligation: mezzanine capital is only available for a certain period of time and must be repaid afterwards.
2) Possible higher return: Mezzanine financing often involves a higher risk. This translates into a higher return for the mezzanine investor.
3. subordination: permitted mezzanine capital is often subordinated; in the event of insolvency, the mezzanine capital is only used after the capital of the normal creditors, but still before the equity investors. In such cases, the mezzanine capital is considered economic equity, as it is also liable for losses.
4. minor rights of co-determination: The providers of capital for mezzanine financing have a very limited right of co-determination in the operational business. These mainly concern information claims and control options.
Private equity is an alternative form of private financing away from the public markets, where funds and investors invest directly in companies or participate in acquisitions of such companies. Private equity capital is provided by institutional and private investors and can be used to finance new technologies, make acquisitions, expand working capital and strengthen and reinforce balance sheets. A private equity fund has limited partners (LP), who typically own 99 per cent of the shares in a fund and have limited liability, and general partners (GP), who own 1 per cent of the shares and have full liability. The latter are also responsible for the implementation and operation of the investment.
The ratio of the expected capital gain to the risk of the investment is called the risk-return profile.
A security can be represented by a security token that is mapped on the blockchain. When a security is represented by a security token on the blockchain, it is an electronic security represented by code. The blockchain serves as an electronic registry. This is based on a network of several interconnected servers. All transactions are cryptographically encrypted and stored in the same way on all servers and are thus protected against forgery. This means that once a security token is mapped on the blockchain, its content cannot be subsequently changed.
An SPV (special purpose vehicle) is a special purpose vehicle, a legal entity that is established for a clearly defined purpose. In our case, we establish special purpose vehicles (SPVs) to represent the shares in the respective target investments.
In business life, there are two ways of dealing with earnings, profits or surpluses. On the one hand, they are distributed and benefit owners or investors immediately. Or they remain in the company or investment property for later periods. Thus, the profits generated by an organisation are not spent or distributed. This process is called reinvestment. This is the case with investment funds, for example. When reinvestment occurs, the income generated by a fund in the assessment period is not distributed to the fund's shareholders but used to increase the fund's assets (reinvested). Thus, the individual units have a higher intrinsic value.
Venture capital (VC) is a form of private equity financing provided by venture capital firms or funds to start-ups, early-stage and emerging companies. This involves financing companies that are considered to have high growth potential or that are showing high growth (in terms of number of employees, annual turnover, scale of operations, etc.). Venture capital firms or funds invest in these early-stage companies and receive equity or an ownership stake in return.
In economics, volatility is a key figure that describes the risk of an asset class. Volatility describes how much a value, for example a share price, fluctuates in a certain period of time. A high fluctuation / volatility could entail a price risk for financial products for market participants.
The Securities Trading Act (WpHG) regulates securities trading in Germany. It serves in particular to control service companies that trade in securities, as well as financial futures transactions, and also to protect the customer.
