What are the Risks?
No investment is entirely free from risk. However, ASR Debt Shares has worked to mitigate some of the risks. First, Debt Shares are secured by performing consumer debt instruments. Our partners at Elevation Capital utilizes third-party collection agencies contracted to “work” the debts and collect from the debtors.
It is not expected that loans will be accepted as secured collateral unless ECP has already worked out a payoff plan with the debtor. ASR Debt has third-party oversight of its operations through Horizon Trust which serves as the custodian of specific escrow accounts processing its funds. These escrow accounts are controlled by an escrow agreement that restricts access of interested parties to an investor’s money and authorizes the custodian to move funds only under specific guidelines.
Here are the ways we mitigate the risks:
1. Collateralized Performing Trust Accounts
Trust Accounts are opened for each monthly investment.
Individual payer/debtor accounts are placed in the trust.
Debt Settlement Agreements & Planned Payment Agreements accounts are placed in the trust to fully collateralize the loan.
2. Every six months 1/6th of the principal is placed back into the trust account and kept for redemption until the end of the 36-month term.
3. UCC filings exist on all trust accounts for the total amount raised, which gives ASR the first lien for the assets.