Ripple’s $500 million share sale in November attracted several of Wall Street’s giants, but also highlighted the aspects of caution with the institutional approach, reported Bloomberg.
Brevan Howard, including affiliates of Fortress Investment Group, Citadel Securities and Pantera Capital all took part in the investments that landed Ripple a $40 billion valuation.
However, according to Bloomberg, the structure of the deal revealed a layer of strategic caution through profit-protection provisions.
Investors negotiated terms giving them the option to sell their shares back to Ripple after three or four years at a predetermined, higher price, essentially securing a profit unless Ripple goes public before then.
If Ripple chooses to buy back the shares, it must provide an annualised return of 25%.
For some investors, the primary focus wasn’t on Ripple’s software or payment infrastructure, but on XRP itself.
Two of the funds involved in the round estimated that the token accounted for at least 90% of Ripple’s net asset value, according to MSN.
For more details on the original investment round, see CaPio’s previous coverage here: Ripple secures $500M in institutional investment – Capital Pioneer.
