If you invested in deals on Percent, you likely heard of Percent Prime as well. So what makes Percent Prime different from the rest of the offerings on Percent?
Making alternative investments as accessible as possible has been Percent’s mission from the start, and we will always have opportunities that have shorter durations, low minimums, and zero fees. As we grew our investor base, we recognized that there are those who may be seeking more bespoke structures, longer durations, and are willing to invest at higher minimums to achieve these objectives. With that, Percent Prime was born.
What are the primary differences with Percent Prime offerings?
One of the greatest differences between standard offerings and Prime offerings is the duration. Our conventional notes are short in tenor, ranging anywhere from one to nine months with call periods set as frequently as monthly or semi-monthly. Compared to this, Prime products range from 10-36 months with longer non-call periods built in. These longer durations and non-call periods allow investors to be subjected to less reinvestment risk, making it easier to achieve the stated APY subject to their performance.
Given the longer tenor, any offering longer than nine months can not have more than 99 investors. (This is not a Percent decision, but a regulatory mandate.) Due to this, Prime offerings will have a higher minimum investment than the current minimum of $500 on our retail platform.
How does the investment process differ with Percent Prime?
Investors in Prime offerings have the unique opportunity to offer feedback on deal structure and terms before the deal launches, shaping the final size and price ahead of it coming to market. Our team works closely with Prime investors and considers the comments and questions we receive from our investors through this pre-marketing exercise. The pre-marketing exercise consists of a “teaser” detailing the investment opportunity, along with a survey to gauge sentiment and feedback. We review all the entries in detail and share the results with the deal originator. From there, we work with the originator to structure the deal to the wants and needs of our investors to the best of our abilities.
How do you get notified of Prime deals?
In order to form part of our Prime Investor distribution list, you must first participate in an available Prime opportunity. After you participate in your first Prime offering, you will receive Prime specific emails such as advanced notices when Prime opportunities become available and Prime deal teasers, which allow investors to indicate demand for potential Prime notes. At this time, existing Prime investors are the first ones to receive notice when Prime deals are available, but after they’ve had the opportunity to invest, an email notification will be sent to our broader investor base inviting them to participate.
Are there any fees associated with Percent Prime?
The standard notes we offer that are less than 9 months in duration have no fees. This differs from Prime where, in exchange for these types of structural differences, investors in these offerings will be subject to a 1% annual servicing fee that is taken from their interest payments at every distribution. This is significantly smaller than the 1.5% annually plus 8-10% carry over a high water mark that most funds would charge.