The Darwinex Pivot
Before -> After?
We're pivoting our business model to grow investor capital and the profitable provider pool
The Changes
From
1st June 2020,
there will be a NEW Darwin for each OLD Darwin, because we’re pivoting our investor model to a NEW
@Target Risk
, aka Value at Risk Benchmark
@Brokerage
Commission schedule
Asset Management Fee schedule: including
@Performance/Success Fee
and
@Management Fee
Parameter
In the past
Change
Going Forward
Comments
1
Target Risk
Max. 10% Value at Risk
Goes down by 35%
Max. 6.5% Value at Risk
Applies to “new” DARWINs & investors - we encourage existing investors in
old
DARWINs to switch to
new
DARWINs and use portfolio leverage to scale up to “old” risk/return level.
2
Brokerage
25$ per million $
60% lower commissions
10$ per million $
The reduction is across both “new” and “old” risk DARWINs.
We’ll stop paying diversification rebates.
3
Performance/Success Fee
20% quarterly success fee
High Water-Mark
No change in profit percentage
But: NEW Darwins pay 60% less brokerage → more performance!
20% quarterly success fee
High Water-Mark
Performance and therefore
@Performance/Success Fee
s heavily depend on i)
@Brokerage
charges and ii) strategy rotation
New DARWIN generates substantially more investor:
Profit and
Choice of profitable investable strategies
4
Management Fee
No management fee
Introducing a management fee
1.2% per annum on 6.5% VaR
1.85% per annum on 10% VaR
Inactive DARWINs accrue no management fees.
5
Providers overall
"Paid” success fee to Darwinex, via investor
@Brokerage
paid to Darwinex broker
Darwinex waives investor brokerage revenues
Provider performance feeds 1:1 to investor profits without brokerage friction → more provider success fees → makes possible to share success fees 75% provider 25% Darwinex
Darwinex is waiving revenue to facilitate professional investor AuM acquisition going forward
6
Investors overall
Darwinex indirectly volume incentivised and not directly incentivised for investor AuM or performance
Darwinex will charge a management fee and a share in success fee paid
Darwinex directly incentivised for investor retention and performance
84% of investors would have done better under the new than under the old model - and 84% underestimates the impact of better provider choices and less stop losses.
No results from filter
6
Count
What should I do now?
Strictly speaking,
Providers
have
nothing
to
do
other than trade well. We take care of the rest.
Investors have
nothing
to
do
, but should note that
They’re welcome to keep
old
DARWINs, and will benefit from EVERY improvement going forward, BUT
Old DARWINs can be sold, but no longer be
bought
.
Having said that, please keep reading, there’s plenty more detail!
Questions / Feedback?
Please let us know what we must explain better and we’ll do our best on the dedicated
or at the
.
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