This exciting program allows you enhance your existing investment by making a temporary assignment to the Foundations Program who borrow against it to invest in a conservatively managed fund of funds. A bulk loan facility is provided by Barclays Bank and secured against the pool of assigned investments. The loan is drawn down over 26 months and invested in a conservative fund of funds managed by Barings Asset Management. The program has target average returns of 4%-6% per annum after costs over a 5 year period. Entrants to the program must be prepared to commit for 5 years. By using this program, you could potentially enhance the return of your existing investment by 20%-30% over 5 years. You still keep control over the asset allocation (choice of funds) in your existing investment. The gains (or losses) from this Program are paid upon exit.

The Foundations Program plc

The Foundations Program has been designed to exploit the benefits of medium term investment strategies whilst mitigating the drawbacks of leveraging structures. They believe their investing strategy and structure will produce a reasonable return above the cost of borrowing in any 5-year term. You still keep control over the asset allocation (choice of funds) in your existing investment. The gains (or losses) from this Program are paid upon exit, which should be after a participation period of at least 5 years.

It has been well devised to use the best features of hedge funds, with profits bonds and currency trading, which have been combined to reduce risk. It gives you the potential to enhance the return of your existing investments by borrowing against them and reinvesting the proceeds to generate an additional return. It does this without the normal levels of cost, administration, and risk associated with conventional leveraging.

Assignable assets are offshore life policies and other unitised collective schemes (subject to approval), which have liquidity and are easily valued.

The way that is works is:

• You assign your investment policy to FPP who use it to automatically borrow 70% of the value (if it is in equities, less for hedge funds, more for property or cash) and reinvest the loan to generate the additional return.
  
• The lending is provided by Barclays Bank as a single bulk loan to keep costs down and is adjusted each month to correspond to the value of the assets pledged. Only 25% of the facility is drawn down at the start and then this increased by 3% per month over the following 25 months.
  
• The money is invested with Baring Asset Management on a drip feed over 26 months so it “averages in”. Barings run a conservatively managed fund of funds with a target return of 8% per annum.
  
• As profits are made they are crystallised into low risk strategies. Low risk strategies are used, as once these profits are realised, they no longer have to service a borrowing cost.
  
• The Program also has a sophisticated currency management mechanism. Because assets are pledged in different currencies, the borrowing is structured so that at least 60% is in the same currency as each asset pledged. A maximum of 40% of the loan is in an unmatched currency, usually one with the lowest interest rate. For example, the Japanese yen interest rate is currently 0.1%. Hedging techniques are used to reduce the currency risk exposure and reduce the cost of borrowing.
  
• During the period of assignment you still maintain management control (fund selection) of your assigned investment.
  
• Over a 5 year period the expected returns vary with the growth of your original investment and the net growth of the FPP program as shown in the following table. FPP investment growth figures are before costs, which are expected to average 3.5% - 4.5% per annum:

The process is made very simple by being housed under one roof and your existing policy and investment strategy continues as before, running separately to the Program. You receive an annual statement detailing progress in the Program which essentially runs in the background.

To benefit from this, investors can join the Fund at any month end and they will start to accrue the return generated, which is based on the collateral security they provide from month to month.

The Program is an exciting and new way of leveraging your portfolio conservatively. It can substantially enhance the total return from an investment over the medium term at controlled levels of risk. The investment of the original portfolio should be unaffected, and the Program provides additional diversification. Instead of investing cash you are assigning your policy and the fund determines the collateral value each month and treats this as cash.

If you enter the Program, you need to remain in it for 5 years as there is a penalty fee of 2.5% if you exit in this time. Also, you do not keep any gain (above the 2.5% to pay the penalty charge) but are still liable for any losses. After 5 years you can continue in the Program and exit penalty free at any time.

A decision to enter the Program should only be undertaken in the context of all financial circumstances and planning requirements.

Charging Structure:

The cost structure is complex and some of the costs are variable, please read the Offering Document for a breakdown.

Other Details:

     The dealing date is the 1st of the month.
     Minimum Entry: US$65,000 of assets pledged

Security & Corporate Structure:

This Program may cause your original assets to go down in value, especially If redeemed within 5 years. This risk is reduced the longer the investment is held. Past performance is no guarantee of future performance.