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Getting Started

  1. What is a security?

    There are several definitions of what is a security, but in summary we can say that:
    1. It is an investment of money
    2. There is an expectation of profits from the investment
    3. The investment of money is in a common enterprise
    4. Any profit comes from the efforts of a promoter or third party
    Securities can be broadly categorized in three types: equity, debt or hybrid. An equity security represents ownership interest held by shareholders in an entity; A debt security represents money that is borrowed and must be repaid, with terms that stipulates the size of the loan, interest rate and maturity or renewal date; Hybrid securities, as the name suggests, combine some of the characteristics of both debt and equity securities.
  2. What are security tokens?

    Security tokens (or tokenized securities, or investment tokens) are digital assets issued using blockchain technology that represents a security. They are the intersection between digital assets (tokens) and traditional financial products – a new technology improving the traditional system.
  3. Why invest in a security token?

    Security tokens are digital assets that are backed by real assets, like distressed real estate in the case of ReitBZ. Security tokens are an easy, bureaucracy-free way to access investments that may not be easily accessible through traditional investment vehicles.
  4. Are security tokens cryptocurrency?

    No. Crypto currency, mainly bitcoin and ether, brought a series of new technologies (blockchain, consensus algorithms, proof-of-work) that can be used in other applications unrelated to cryptocurrency. Bitcoin created the possibility of transferring amounts easily and globally without depending on a centralized entity. Ethereum expanded this idea by introducing “smart contracts”, enabling the programming of these functions. Security tokens use these technologies, bringing new products and distribution formats to the market. The objective of the securities is not to serve as a value reserve or means of payment (like cryptocurrencies) but rather to represent the investment in an underlying asset.
  5. What is BTG Pactual´s opinion on crypto currencies?

    We believe crypto currencies have brought technological innovations that are here to stay, regardless of the future of these cryptocurrencies. There is room for a means of exchange and a digital and global value reserve alongside traditional currencies, provided they follow regulations and guarantee the security of users.
  6. Does BTG Pactual have other projects involving blockchain?

    The Bank is always assessing and studying possible uses of new technologies in our business. In the specific case of blockchain, its use for distribution is the quickest and most proven path of the technology. As new cases of usage appear and show to be efficient, we will assess their adoption.

The Offer

  1. What is an STO?

    STO or Security Token Offering is the process in which security tokens are offered to the general public.
  2. Why is the offer being held in the Cayman Islands?

    Because regulation is more adapted in relation to digital assets and we already have activities in this jurisdiction via our Cayman Branch.
  3. Why USD 15mm offer size? Isn’t it a small amount?

    The size was chosen to optimize distribution efforts and potential returns for investors. Since it is a portfolio of distressed real estate assets, with lower liquidity and greater sensitivity to economic activity, we opted for a size that guarantees the best possible selection for token holders.
  4. What are the offering´s compliance procedures?

    Reitbz offering follows the same rigid compliance standards demanded by the applicable regulators and by BTG Pactual.
  5. What is the difference between an ICO and STO?

    ICOs were a form of funding found by startups in a speculative cryptocurrencies situation. They were based on “utility tokens” that give no participation whatsoever in the results or ownership of these projects, only access to services. STOs represent real assets entitled to direct participation (via results or ownership) in the assets and/or projects that they represent.
  6. Why aren’t we distributing the offer in Brazil? Or in the US?

    For efficiency and cost reasons, we opted at this point in time not to distribute the offer in Brazil and the US, alongside other countries with restrictions on this type of asset.
  7. Have you spoken to CVM (Brazilian SEC)? What do you think of Brazilian regulators´ stance on digital assets and blockchain?

    Yes. We are in constant talks with regulators on how to use new technologies to make capital markets more efficient. In the case of digital assets, we believe CVM and other regulators understand the subject well and are pro-innovation, provided this is done safely and generates gains for the market and for the country as a whole.

The Investment

  1. Why a portfolio of distressed real estate assets?

    Real estate is a common investment worldwide. Brazil´s recent economic situation, where we went through the worst recession on record, and our current moment of potential recovery are the ideal scenario for real estate investments, mainly in distressed real estate assets due to current high inventory levels and real estate developers´ need to monetize their assets.
  2. What is BTG Pactual´s experience in real estate?

    BTG Pactual is the largest real estate manager in Brazil, and also operates throughout Latin America, with a portfolio of over USD2bn under management in several real estate segments.
  3. What is BTG´s relationship with Enforce?

    Enforce is a company of the BTG Pactual group, specialized in the recovery of distressed credits.
  4. How can investors track their investment?

    Via the platform itself, where they will have access to a Dashboard with transparent data on investments, allocation, results, cash position, etc.
  5. What is the potential gain for investors?

    Since it is a diversified portfolio of distressed real estate assets, expected returns are higher than in traditional real estate investments. In the case of Reitbz, we estimate, with no guarantee of profitability, investor returns in the 15-20% p.a. range
  6. How can investors monetize their positions?

    Investors can monetize their investment by receiving dividends (50% of post-cost profits will be paid out as dividends) or by selling their tokens in the secondary market (please refer to item 1 under “The Token” below).
  7. How will dividends be paid?

    The payment of dividends will be done in the same currency used to participate in the offer and will be credited directly into the digital wallet registered by the investor on the platform.
  8. How is the portfolio constructed?

    The portfolio is constructed via negotiations with developers and banks with portfolios of distressed real estate assets. BTG Pactual and Enforce use their expertise to identify and select the best real estate to construct Reitbz portfolio.
  9. Does BTG Pactual operate in the same segment for its proprietary portfolio?

    Yes.
  10. Doesn’t this generate potential conflicts of interest with Reitbz investors?

    Yes. We tackle this via strong compliance during the investment process and our mission to exceed our clients´ expectations, aware that this is what will generate value for us in the long term. In actual fact, it is commonplace to introduce our clients to business opportunities where we are investing our own capital.

The Token

  1. Will there be a secondary market for Reitbz?

    Yes. BTG Pactual will act as Market Maker, providing liquidity in the secondary market directly on Reitbz´s platform.
  2. Will Reitbz be listed on an exchange?

    Not at first, but we are evaluating some alternatives. Since it is a security token, there is still no qualified exchange on which to list Reitbz. The plan is to list it as soon as an exchange emerges with capacity to list security tokens and that is compliant with the compliance standards demanded by BTG Pactual.
  3. Where will the tokens be held in custody?

    This will be done by BTG Pactual pursuant to the security standards demanded by the industry and by BTG Pactual and reviewed by our security office team.
  4. Do you think the technology is safe? Are there risks of fraud?

    Yes, it is safe. The use of blockchain technology for distributing products has already been successfully tested in recent years via cryptocurrencies and ICOs. Although a 100% risk-proof system is impossible, we believe the technology in question has more than satisfactory safety levels. When we combine this with the anti-fraud experience of the banking industry, we have a safe system.
  5. How do you protect yourselves from money laundering?

    By using, in the Reitbz offering, all the anti-money laundering controls that we already use in our normal processes, including via outside service providers.
  6. What is the typical profile of investors in these assets?

    Investors already familiar with blockchain technology and digital assets and who are already seeking investments to which they wouldn’t have access via traditional instruments.
  7. Can you better explain which technologies and platforms you used?

    The tokens will be issued using the Ethereum platform, via the ERC20 protocol, which standardized some functions of “smart contracts” and enables it to be used in a series of applications, as well as being able to be added to the main digital portfolios available.