Background

Decoding Private Markets’ Performance. Reshaping Liquidity.

MISSION AND VISION

Creating the Best Liquidity and Liquid Investment Marketplace for Private Market Funds’ Investors

By introducing innovative technology, XTAL is allowing investors to exploit new pricing information and trading possibilities that make “illiquid” private funds as efficiently accessible and exchangeable as if they were bonds.

Private market funds are difficult to price and trade. Blind pools, J-curve, leverage, limited information, long term horizons, contractual constraints, cash flow uncertainty, non-verifiable NAV valuations hinder comparability and-fungibility. ‘Once you get beyond a certain level of investor, (…) that’s a challenge when assets don’t offer daily liquidity or pricing.’ Illiquidity, however, impacts both institutional and individual investors. No possibility of rebalancing or reinvestment causes inefficient portfolio management and dilutes returns.

 

XTAL

/ˈɛkstal/
Acronym: eXchange Traded ALternatives
Abbreviation: short for crystal, standing for transparency
OBJECTIVE

Enabling the Trading of Intelligible Expected Prices

Commoditization

Like commodities, for every vintage, private market funds harvest future cashflow uncertainty. With commodities, the non-fungible risk of future delivery, with respect to uncertain time and quality, is traded against index prices. A similar approach is used with corporate bonds, traded against index prices.

XTAL is using proprietary IP to uncover private market fund expected prices. The statistical proxy of an expected price is an average, a benchmark index. Properly constructed indices require time-weighted returns, the missing link in the private market fund industry.

Leveraging unique comparability, duration and time-weighting attributes, XTAL is shaping the forward curve, or term structure, of private market yields, and enabling the use of derivatives to rebalance or hedge private market allocations without moving the assets from investors’ portfolios, like with commodities

UNLOCKING EFFICIENT TRADING

A Broader Notion of Private Market Liquidity

Derivatives

Splitting private market credit and equity risk incentivizes and attracts a broader group of investors (arbitrageurs, hedgers, traders, etc.), leading to a bigger pool of available liquidity.

  • Rebalancing or hedging private market allocations without moving the assets from investors’ portfolios
SIGNALS

@thedarcroom

Proprietary technology, investment and capital markets expertise to shape a more efficient marketplace for private markets’ investors. Engagement and knowledge sharing to grow reputation, trust and lasting relations.

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