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A private investment capital subscription (PICS), is a financial tool that relies on a small pool of investors’ money for real estate investments. The money managers of private investment capital subscriptions or PICS are real estate investment experts, who also invest in related real estate products such as tax lien certificates, foreclosures, notes, as well as development projects on behalf of their subscribers and themselves. ==Operation== PICS operate similarly to a hedge fund in the sense that the money managers are highly skilled and knowledgeable real estate investors and there are great opportunities for investors to reap high returns. However, there are significant difference between PICS and other investment funds because PICS tend to function more like unregistered bonds, by promising the investor a set return on their investment and the added protection of their original investment dollars. Another difference between PICS and hedge funds are the investors themselves. PICS investors are not required to have a large net worth and the number of subscribers is limited to thirty-five subscription members, who invest a maximum of One-hundred and fifty thousand dollars each. The total amount raised by a Private Investment Capital Subscription’s initial private offering is limited to Five million dollars. PICS commonly sell 33 subscriptions each worth One hundred and fifty thousand dollars to only thirty-three individuals (no family trusts, partnerships, corps. Etc. are permitted to participate), which raises $4,950,000.00. The two remaining subscribers of the 35 originally subscriptions available are sold to the expert money managers, who add $50,000.00 to the pool. In exchange for their expertise, the money managers share in the profits equally. Unlike hedge fund managers who generally do not contribute any money to the hedge fund but are compensated by the performance of the hedge fund, PICS managers contribute to the private investment capital subscription and are compensated only after the other thirty-three $150,000-subscription-investors are paid a guaranteed $15,000.00 or a 10% annual return on their investment. After the 10% payment has been made the PICS money managers may choose to keep, distribute or reinvest any additional profits earned from the $5,000,000.00 raised in initial offering. Unlike a real estate investment trust or REIT, a Private Investment Capital Subscription does not give its investment subscribers any ownership in the real estate held and often PICS invests in real estate paper, such as trust deeds, notes, tax lien certificates and foreclosure properties. The actual ownership of the real estate and related products is held by the managers who are often a separate Limited Liability Partnership or Company. Unlike hedge funds, which are generally opened to an unlimited number of highly sophisticated and well-healed qualified investors, PICS cater to moderate-income investors who are worth $300,000.00, in excess of their primary residence, art collection and vehicles. The investor’s gross annual income must be at least $150,000.00 and of course the investor must have $150,000.00 to invest. Investors in PICS also sign a subscription contract agreement that states that the subscription investor is financially solvent to travel to any area in the world. The purpose of signing the travel agreement is to injsure the subscription investors the ability and the right to inspect any and all investments made by the PICS money managers. After three years, PICS management reserves the right to buy back the subscription at the original price of $150,000.00 after the 10% annual earnings have been paid to the subscriber. However, money managers frequently elect to pay the investors substantially higher returns than the contracted 10% thus allowing the investors to participate in profit sharing distributions. The reason PICS managers often choose to distribute profits among the subscribers is to reward investors and to distribute the capital gains tax burden among the pool of investors. Because many investors use their self-directed IRAs to invest in private investment capital subscriptions these investors are not required to pay any capital gains taxes on the profits they receive until they withdraw the money from their self-directed IRA. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Private investment capital subscription」の詳細全文を読む スポンサード リンク
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