Capital

Overview
Investment Philosophy
Approach To Create Value
Investment Portfolio Examples

ICO Capital Creates Value

ICO Capital was started in 2009 to meet an internal need at the ICO Companies to earn attractive returns on surplus capital that was otherwise awaiting deployment in private businesses or real estate deals. ICO investment strategies are based on achieving an optimal balance of returns across asset classes while preserving liquidity so the surplus funds can be quickly deployed on short notice as attractive deals materialize in the core real estate business. ICO’s goal is to maximize long-term, risk adjusted performance, given liquidity objectives. ICO does this through applying the same value oriented discipline ICO leadership applies to managing private businesses it owns: putting capital to work in great businesses at attractive prices.

ICO Capital focuses on three principle opportunities: 1) private equity, 2) real estate debt strategies, and 3) diversified investments in the publicly traded bond, equity, and derivatives markets.

Private Equity

ICO Capital uses its proprietary business relationships with elite Venture Capital and Buyout Principals & Firms, as well as direct relationships with entrepreneurs, to source direct private investment in stellar businesses with strong management teams.

Private/Real Estate Debt

ICO Capital invests in debt used to support real estate or business projects in transition. ICO Capital, due to its intimate knowledge of the industry, of the development process, and the value of the underlying asset, can often respond more quickly and flexibly than traditional lending sources.

Public Market Investment Strategies

ICO Capital uses proprietary asset allocation and co-variance modeling software to create a public market portfolio that diversifies underlying macroeconomic, counter party, and other exposures to generate attractive absolute returns over a market cycle. ICO Capital invests both for its own account as well as uses professional money managers to advise on its portfolio.

ICO Capital Contacts

PUBLIC MARKET & REAL ESTATE INVESTMENTS AND OPPORTUNITES

Jesse Brown

Protect & Enhance Long Term Wealth

A practical investment philosophy

ICO Capital’s mission is to protect and enhance long-term wealth. Adhering to a disciplined, value-based investment approach has added significant value over time.

A holistic perspective comprehends the entire balance sheet of the combined companies.

ICO constructs its portfolio by considering all assets and liabilities across the combined ICO enterprises.

Both diversification and concentration are important

Traditional academic approaches validate that asset class diversification can substantially reduce a portfolio’s investment risks without necessarily compromising expected returns. ICO, however, often goes against conventional academic wisdom in its investment approach. Concentration, when one understands underlying investment characteristics and value, can also reduce investment risks while still enhancing returns. ICO disbelieves rote application of traditional risk/return models-often higher returns can be generated with lower risk through applying proprietary knowledge and deal structuring techniques.

Active vs. Passive Investment Management

It is well known among academics and professional money managers that, while active investment managers can add value, in aggregate they tend to underperform a given market average because of add-on fees and taxes. Despite imposing a burden of due diligence and continuous monitoring, ICO selects active asset managers with the right fee structures and incentives aligned with ICO, to supplement investing for its own account in the public markets.

Information-based,asymmetric, and less-liquid strategies are most likely to outperform

Inefficiencies are best exploited through non-traditional investments that have greater potential to reward active management and a disciplined manager selection process.

Hold cash to reduce risk.

Holding cash (or deleveraging) can reduce a portfolio’s risk and return profile without sacrificing portfolio diversification.

Tax optimization is important.

While tax rules vary across investment situations, ICO considers after-tax returns when making all its investments.

Investing innovation has exploded over the last several decades. Technology has enabled and will continue to enable new approaches such as high-speed trading, increasingly fine niche strategies, ETF market surrogates, etc. Despite this, ICO does not feel the need to fundamentally change its value-based investment philosophy and processes, grounded in approaches developed decades ago. Patient analysis and adherence to a value-based discipline will continue to outperform versus other investing disciplines over a market cycle.

Creating Balance Investment Vs Wealth

How ICO Capital Creates Value

ICO Capital is fully aligned with the ICO Companies’ interests, applying an approach to generate superior, risk-adjusted returns with liquidity as needed to support ICO private company and real estate investment opportunities as they materialize.

ICO Capital is owned 100% by Ivory Homes and ICO Companies, for the Ivory Companies

ICO Capital has no outside shareholders or influences. ICO Capital serves only ICO Companies, providing scale and focus that gives access to non-traditional and sophisticated investment vehicles. ICO Capital does not seek profit for itself but only seeks superior returns for its owners, thereby avoiding conflicts typical to most fee-based asset managers.

ICO Capital’s governance structure positions it for superior investment performance, while protecting owners’ capital

ICO Capital’s investment management team has a simple goal: to maximize long-term, risk-adjusted performance, balanced by liquidity objectives.

ICO Capital is governed by a properly-motivated Board of Directors consisting solely of owners direct investment decisions, executed by members. The Board makes strategic decisions and appoints ICO Capital management.

Investment management team members have no mandate to seek profit for ICO Capital.