Thursday, 31 July 2014
Last updated 3 hours ago
Feb 4 2014 | 2:49pm ET
Tocqueville Bullion Reserve, a private partnership that will invest 100% of its net assets in gold bullion, launched in January with assets of $50 million.
Billed as “the first institutional-grade vehicle to offer real ownership of physical gold,” TBR was launched by TERA, a limited partnership consisting of John Hathaway, senior managing director of Tocqueville Asset Management; Robert Kleinschmidt, president and CIO of Tocqueville; and Simon Mikhailovich and Michael Sollott, co-founders and partners of Eidesis Capital.
Hathaway told FINalternatives the partnership was designed to help manage systemic risks revealed during the global financial crisis and later through Refco, MF Global, and the Cyprus banking crisis.
"Despite the best efforts of monetary authorities," said Hathaway, "systemic risks have not abated and are resurgent across the emerging markets."
By storing gold bullion bars outside of the financial infrastructure—in insured, private, non-bank vaults in Switzerland, Singapore, Hong Kong and the U.S.—TBR allows investors to "maintain liquid emergency reserves that do not rely on financial counterparties or functioning capital markets."
Hathaway said initial investors in TBR included major gold producers, wealthy individuals and family offices.
TBR's partnership structure, said Hathaway, ensures it is subject to the controls—legal, regulatory, compliance, audit, insurance and custodial—standard in any institutional financial product. But TBR is a commercial, not a financial product and therefore not regulated by banking or securities industry authorities.
"Gold bullion is purchased or sold by TERA when the limited partner enters or exits the partnership. Investment or redemption takes place on a daily basis with 24 hour notice. Trade executions in the highly liquid gold market are at cost; TERA does not markup for commissions. TBR does not use leverage, derivatives or any other financial instruments."
TBR carries a minimum investment of $100,000.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…