Here is what maybe a huge step for Domains to become a real world asset in the wider investment community.
“The DDF offers institutional and private investors equity investments in Internet Domain Names.”
“Its the first fund to invest in domain names only.”
The release from Grand Cayman
“Recent million-dollar domain deals and stories such as the ones around sex.com, slots.com, vodka.com have curbed interest from the public, media and institutional investors in domains as an investment and asset of high interest. With the introduction of an investment fund dedicated only to domains, the market takes another step in establishing domains as a real-life asset.”
“The domain business is still at an embryonic stage and I see more and more institutional investors are moving into this segment.”
“When domain names had been introduced 25 years ago only few could imagine into what the domain business would grow into.
“The fund started in the summer of 2008 when 3 long time domainers from Austria, Hong Kong and Germany joined forces and merged their domain portfolios. Starting in March 2009, the trio offered friends and family to invest into their domain-business to be able to purchase more valuable domains.”
“Due to the great performance many more investors wanted to move in. In its first year the fund had a performance of 135% and close to 100 investors but was still just a managed account based in Austria.”
“Early 2010, as even more investors wanted to move in, the trio decided to incorporate the DDF as a mutual and administered fund in the Cayman Islands and to formally incorporate the business. Michael Marcovici, who is the fund´s founder and 1st director expects more competition in the next years: “the domain business is still at an embryonic stage and I see more and more institutional investors are moving into this segment.”
The Domain Developers Fund holds a portfolio of in various segments of the domain market, in the .com space as well as in some of the popular ccTLDs of Germany, India, UK, China, Switzerland, Colombia and many others. On the funds website www.ddf.lu the Fund´s Management is especially bullish for ccTLDs: “search and services are becoming increasingly local and domains just go along, we see the biggest growth in ccTLDs (country code domains) in the years to come.”
“The fund uses various monetizing techniques to generate returns of up to 50% of ROI/year and domain. The fund is managed by Michael Marcovici and Alberto Sanz de Lama, both well experienced in online markets and long time domainers. The board of advisers consists of Stefan Piech, Marko Rodzinek and Philip Schindler.”
“The DDF is the first of its kind and is an opportunity for investors who want to be a part of the domain market. The funds mangers Marcovici and Sanz expect returns of 20 to 40% per year.””
Certainly interesting and something many domainer have been talking about trying to do for years.
From their website:
“”The DDF offers you a great opportunity to participate in the growing domain monetization business. The roots of the DDF go back to 2006 when the core team of the Fund around Michael Marcovici first met and joined forces in order to optimize the return of their portfolios. Finally, in early 2008, the team decided to merge their portfolios into a single one, allowing for every one of the three founders to concentrate on one part of the business. In early 2009, the team decided to open up their operation to investors in a Friends and Family program. The fund managed a performance of 124% in 2009 and another 7% in the first 9 weeks of 2010 . In February 2010 the Fund incorporated in the Cayman Islands, which proved to be the best location for the first and only fund in domains open to investors.”
I guess the question now is does anyone know or have heard of any of the managers of this fund, because I don’t.
Alberto Sanz de Lama
The fund appears to be offshore, not sure about compliance with US security laws. Funds in the US usually do not “predict future results”, or at least use a disclaimer that past results are not an indication of future results.
While a successfully run fund would immeasurably help the domain industry, in the short and long term, and on many levels, the last thing we need is a publicized fund that concentrates in domain names to run into any problems, financial, legal or otherwise.
Here are the particulars of the fund from their site:
|Jurisdiction||Cayman Islands Mutual Fund Law|
|share classes|| individuals(Class A), institutionals(Class B)
|Lockup period||6 months|
|ISIN (Class A)||KYG280681076|
|ISIN (Class B)||KYG280681159|
|CUSIP No. (Class A)||G28068 107|
|CUSIP No. (Class B)
|SIX Telekurs (Class A)||11536830|
|SIX Telekurs (Class B)
|Directors|| Michael Marcovici, Alberto Sanz
|Advisory board|| Marco Rodzinek, Philipp Schindler, Stefan Piech
|Management Fee||2,5% (A) 2% (B)|
|Incentive Fee|| 25% (A) 20% (B)
|Administrator||JP Fund Administrations|
|Bank|| Deutsche Bank
Some concerning issues I’m already seeing is on their site they list as “Corporate Partners” is ICANN. Other than paying ICANN fees like the rest of us, I would love to know how ICANN is a “Corporate Partner”
Also listed on their site as “Industry Partners” is most of all the auction houses where most of us get many of our domains from, including NameJet.com. SnapNames.com and Sedo to name a few. Just using these company’s service doesn’t make them a “partner”.
I have already contacted the fund and hope to have some additional information soon.