€250 Million Bond

Fundament Group, a German based company looking to tokenize real-estate within the European nation, was just given the regulatory greenlight by BaFin to host an upcoming STO.

This STO will see Fundament distribute token based bonds, representing fractionalized ownership of a portfolio, backed by German real-estate. It is the intent of Fundament to sell €250 million worth of bonds.

Fundament Real Estate Token gets approval by German Financial Supervisory Authority! We received green light for the sale of our #securitytoken. The token is backed by a real estate portfolio worth EUR 250 million. Stay tuned for exclusive news on our upcoming public sale. pic.twitter.com/ipBw3abp1X — Fundament Group (@GroupFundament) July 23, 2019

A Closer Look

The opportunity will be structured as ‘subordinated token-based bonds with annual variable interest rates’. Fundament indicates that these tokens are to be ERC-20 based, with investors expected to receive returns ranging from 4-8% (IRR) p.a.

Dividends, based upon the performance of the portfolio backed by German real estate, are paid out annually. The investments are to mature in 2033, at which time, investors will see their investments returned.

To learn the full details and inner workings of the offering, Fundament has made their prospectus available HERE.

Facilitated by Ethereum

While various competitors have popped up in recent months, Ethereum is still the ‘big-dog’ in the digital securities sector. The protocol continues to retain a top-ranking within the industry, and benefits from massive developmental efforts.

Between the ‘first-to-market’ boon, and established network, it stands to reason that it will be some time before Ethereum is supplanted as the most commonly used protocol within digital securities.

Commentary

Fundament Group representatives took the time to comment on the regulatory greenlight with multiple entities. Speaking with CoinDesk, Fundament Founder, Florian Glatz, had the following to say.

“The reason we went through this long tedious process with regulators was to get rid of any restriction. Normally these projects are limited either by the minimum investment amount, which would be north of €100,000 or limited heavily in the amount of investors you could have. So it’s the first really like mass-market tokenized real estate for the world.”

Popular Implementations

To date, arguably the most popular implementation of asset backed tokenization, would be in real estate markets. In an industry comprised of high value- low liquidity, assets, which are geographically restricted, digital securities provides an answer to each of these issues.

Through tokenization, and distribution of digital securities backed by real estate, these assets now have the ability to become borderless. Investors will be able to gain exposure to lucrative real estate markets around the globe. By opening these opportunities to a global pool of investors, they are also benefitting from the increased liquidity being seen through secondary market trading.

While there is a plethora of industry that has the potential to be turned upside-down through tokenization, real estate remains the clear, and obvious, choice of industry participants thus far.

Fundament Group

Fundament Group was founded in 2018, and is based out of Berlin Germany. The team at Fundament has developed a suite of services providing clients with a ‘one-stop-shop’ for the tokenization of assets. These services will be on full display, as the company completes their very own STO, as discussed here today.

CEO, Thomas Ermel, currently oversees company operations.

BaFin

This European regulatory body is tasked with imposing rules and guidelines, to ensure fair practice among industry participants in finance. This includes various sectors, such as banking, securities, and insurance.