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Can we please logically consider the pension fund funding? 17:37 - Feb 26 with 868 viewsJ2BLUE

Do we think:

A) A pension fund is making a low risk loan to a consortium backed by high net worth individuals for a set return

or

B) A pension fund has literally decided to take a random gamble on a club which currently makes a big loss each year.


Which is more likely? Obviously B is slightly more likely if it's California and not Rhode Island but really, it's got to be A hasn't it?

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Can we please logically consider the pension fund funding? on 17:42 - Feb 26 with 810 viewslowhouseblue

they have provided funding at a rate of interest and with an appropriate degree of security provided by the consortium i would assume. the risk they are exposed to will therefore be different to the risk carried by the consortium. us pension funds are very active in lending in the uk - so the precise sector that they are lending to may be a bit unusual but i doubt anything else is.

And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show

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Can we please logically consider the pension fund funding? on 17:43 - Feb 26 with 797 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 17:42 - Feb 26 by lowhouseblue

they have provided funding at a rate of interest and with an appropriate degree of security provided by the consortium i would assume. the risk they are exposed to will therefore be different to the risk carried by the consortium. us pension funds are very active in lending in the uk - so the precise sector that they are lending to may be a bit unusual but i doubt anything else is.


Agreed. People are reacting like they will own us.

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Can we please logically consider the pension fund funding? on 17:45 - Feb 26 with 771 viewsBryanPlug

They’re investing in Brett. In Brett we trust.

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Can we please logically consider the pension fund funding? on 17:49 - Feb 26 with 733 viewsDarth_Koont

Most of 17.5 million quid is a drop in the ocean for a state police and fire pension fund ... even Rhode Island I’d imagine.

Maybe this is a speculative effort from them to help show a breadth of investment and just make their fund more interesting?
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Can we please logically consider the pension fund funding? on 17:50 - Feb 26 with 713 viewslowhouseblue

Can we please logically consider the pension fund funding? on 17:49 - Feb 26 by Darth_Koont

Most of 17.5 million quid is a drop in the ocean for a state police and fire pension fund ... even Rhode Island I’d imagine.

Maybe this is a speculative effort from them to help show a breadth of investment and just make their fund more interesting?


or the interest rate is high enough to make it interesting?

And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show

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Can we please logically consider the pension fund funding? on 17:52 - Feb 26 with 705 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 17:49 - Feb 26 by Darth_Koont

Most of 17.5 million quid is a drop in the ocean for a state police and fire pension fund ... even Rhode Island I’d imagine.

Maybe this is a speculative effort from them to help show a breadth of investment and just make their fund more interesting?


That's a one off payment. Quite a few people think they have committed to funding the club on an ongoing basis.

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Can we please logically consider the pension fund funding? on 17:52 - Feb 26 with 698 viewsKeno

taking a Idaho as a random US state firmans pension fund

https://www.persi.idaho.gov/docs/employers/gasb/PERSI-GASB-68-2020-Allocation-Re

They has assets worth over $400,000,000 so whatever they have done to fund the purchase is just a very small part of their portfolio and I would suspect its some kind of loan arrangement

$10,000,000 over 20 years with a 9% interest rate.

The the pension needs the money the debt can be sold on or it the opportunity it can be repaid early

If will be low risk to the pension

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Can we please logically consider the pension fund funding? on 17:55 - Feb 26 with 657 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 17:52 - Feb 26 by Keno

taking a Idaho as a random US state firmans pension fund

https://www.persi.idaho.gov/docs/employers/gasb/PERSI-GASB-68-2020-Allocation-Re

They has assets worth over $400,000,000 so whatever they have done to fund the purchase is just a very small part of their portfolio and I would suspect its some kind of loan arrangement

$10,000,000 over 20 years with a 9% interest rate.

The the pension needs the money the debt can be sold on or it the opportunity it can be repaid early

If will be low risk to the pension


Yes but do you agree the pension fund are not going to fund the club for the future including transfers, wages etc?

That's the point lots are making.

I'd be amazed if it's not just a loan.

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Can we please logically consider the pension fund funding? on 17:58 - Feb 26 with 629 viewsKeno

Can we please logically consider the pension fund funding? on 17:55 - Feb 26 by J2BLUE

Yes but do you agree the pension fund are not going to fund the club for the future including transfers, wages etc?

That's the point lots are making.

I'd be amazed if it's not just a loan.


good point

The initial to the buyers may be big enough to cover 'running costs' or even include a drawdown facility where additional funds cam be accessed if needed up to a limit

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Can we please logically consider the pension fund funding? on 18:00 - Feb 26 with 612 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 17:58 - Feb 26 by Keno

good point

The initial to the buyers may be big enough to cover 'running costs' or even include a drawdown facility where additional funds cam be accessed if needed up to a limit


The point I was making in response to people panicking was that it's unlikely a pension fund is going to buy a club, throw millions at it and then get no return.

It's far more likely, as you say, they are either investing a tiny portion of assets up to a certain point or it's a loan with a guaranteed return.

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Can we please logically consider the pension fund funding? on 18:02 - Feb 26 with 590 viewslowhouseblue

Can we please logically consider the pension fund funding? on 18:00 - Feb 26 by J2BLUE

The point I was making in response to people panicking was that it's unlikely a pension fund is going to buy a club, throw millions at it and then get no return.

It's far more likely, as you say, they are either investing a tiny portion of assets up to a certain point or it's a loan with a guaranteed return.


the difference though to a loan from marcus evans is that we won't be able to just roll up the interest and add it to the debt. interest will now be a real outflow of funds.

And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show

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Can we please logically consider the pension fund funding? on 18:02 - Feb 26 with 582 viewsPhilTWTD

Can we please logically consider the pension fund funding? on 17:52 - Feb 26 by J2BLUE

That's a one off payment. Quite a few people think they have committed to funding the club on an ongoing basis.


That is the idea, build the club up, get it up the divisions, sell it on.
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Can we please logically consider the pension fund funding? on 18:03 - Feb 26 with 564 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 18:02 - Feb 26 by lowhouseblue

the difference though to a loan from marcus evans is that we won't be able to just roll up the interest and add it to the debt. interest will now be a real outflow of funds.


How can it be repaid until we're in the Prem? Taking interest is just damaging their chances of ever getting their money back. Makes no sense.

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Can we please logically consider the pension fund funding? on 18:04 - Feb 26 with 546 viewsDeano69

Who is lumping in a significant 7 figure sum every year (as has been the case for the last 10+)?

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Can we please logically consider the pension fund funding? on 18:07 - Feb 26 with 503 viewsKeno

Can we please logically consider the pension fund funding? on 18:02 - Feb 26 by lowhouseblue

the difference though to a loan from marcus evans is that we won't be able to just roll up the interest and add it to the debt. interest will now be a real outflow of funds.


It may not be, the interest may have an accrual option

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Can we please logically consider the pension fund funding? on 18:07 - Feb 26 with 502 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 18:02 - Feb 26 by PhilTWTD

That is the idea, build the club up, get it up the divisions, sell it on.


The consortium or the pension fund?

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Can we please logically consider the pension fund funding? on 18:07 - Feb 26 with 499 viewslowhouseblue

Can we please logically consider the pension fund funding? on 18:03 - Feb 26 by J2BLUE

How can it be repaid until we're in the Prem? Taking interest is just damaging their chances of ever getting their money back. Makes no sense.


for a pension fund to accept that level off risk the eventual pay off would need to be very high. it's not the sort of thing i imagine fitting into a pension fund portfolio. but who knows.

And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show

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Can we please logically consider the pension fund funding? on 18:10 - Feb 26 with 466 viewslowhouseblue

Can we please logically consider the pension fund funding? on 18:07 - Feb 26 by Keno

It may not be, the interest may have an accrual option


but that would just roll up the risk for the pension fund. do they really lend on that sort of very high risk basis?

And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show

0
Can we please logically consider the pension fund funding? on 18:14 - Feb 26 with 434 viewsKeno

Can we please logically consider the pension fund funding? on 18:10 - Feb 26 by lowhouseblue

but that would just roll up the risk for the pension fund. do they really lend on that sort of very high risk basis?


It would depend on how its structured and what the get out clauses are

Only, dont forget, these financial instruments have a market value so it is say 5 years the pension fund wanted money back they could simply sell the loan to a 3rd party

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Can we please logically consider the pension fund funding? on 18:29 - Feb 26 with 352 viewslowhouseblue

Can we please logically consider the pension fund funding? on 18:14 - Feb 26 by Keno

It would depend on how its structured and what the get out clauses are

Only, dont forget, these financial instruments have a market value so it is say 5 years the pension fund wanted money back they could simply sell the loan to a 3rd party


it's very interesting. pension funds structure their portfolio to match future liabilities. so commercial loans of a particular duration play a very specific role - and they match any risk against the interest rate. but for obvious reasons that doesn't tend to include very high risk loans. other than very big funds any exposure to higher risk assets would be through pooled vehicles - private equity funds, or secondary debt funds - so their exposure to particular individual projects is usually very low.

my bet therefore is that it can only be a conventional commercial loan to the consortium secured on other assets. yes they can sell it on - but only for what it is then worth, so the risk remains. someone, somewhere in all of this is doubtless doing something very clever financially, but i wouldn't expect that to be the pension fund.

And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show

0
Can we please logically consider the pension fund funding? on 18:30 - Feb 26 with 341 viewsJ2BLUE

Can we please logically consider the pension fund funding? on 18:29 - Feb 26 by lowhouseblue

it's very interesting. pension funds structure their portfolio to match future liabilities. so commercial loans of a particular duration play a very specific role - and they match any risk against the interest rate. but for obvious reasons that doesn't tend to include very high risk loans. other than very big funds any exposure to higher risk assets would be through pooled vehicles - private equity funds, or secondary debt funds - so their exposure to particular individual projects is usually very low.

my bet therefore is that it can only be a conventional commercial loan to the consortium secured on other assets. yes they can sell it on - but only for what it is then worth, so the risk remains. someone, somewhere in all of this is doubtless doing something very clever financially, but i wouldn't expect that to be the pension fund.


Agreed

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