Jasper's secondary market is expected to launch to the public sometime in 2021. This article gives investors an inside look into the mechanics of the proposed marketplace.

Private CRE investment funds typically target an 8+ year hold, with our proposed secondary market we are aiming to improve liquidity for private market offerings, so our investors have the potential to exit their investments on a timeframe that suits their individual situation.

Placing a BUY order

Buyers will be able to place a buy order on the secondary market for any fund at any time. Buyers will have the opportunity to review information on the fund including returns history, key metrics, quarterly performance updates, and any recent offer documentation from previous capital raises.

When placing a buy order, buyers will be able to set a price of their choosing within a pre-defined range, based on the fund's latest NAV calculation. This range will be determined by Jasper based on recent third-party asset valuations, recent property transactions in the local market, previous secondary market transactions, and any other relevant market information. It is expected that this range will typically be around 3-5% of NAV. The reason this range is set is to ensure that the unit price accurately reflects the properties underlying value and the inherent lack of volatility in directly held real estate.

When placing a buy order, buyers will also be able to see a summary of current sell orders and the relevant prices. This allows buyers to adjust their buy order to ensure it meets the current market supply in terms of quantity and price.

Placing a SELL order

Sellers will be able to place a sell order on the secondary market for any fund they own at any time from within their portfolio.

When placing a sell order, sellers will be able to set a price of their choosing within a pre-defined range, based on the fund's latest NAV calculation. This range will be determined by Jasper based on recent third-party asset valuations, recent property transactions in the local market, previous secondary market transactions, and any other relevant market information. It is expected that this range will typically be around 3-5%. The reason this range is set is to ensure that the unit price accurately reflects the properties underlying value and the inherent lack of volatility in directly held real estate.

When placing a sell order, sellers will also be able to see a summary of current buy orders and the relevant prices. This allows sellers to adjust their sell order to ensure it meets the current market demand in terms of quantity and price.

Market matching mechanics and example transactions

When a buy or sell order is placed, the system will first try and match it with existing orders at the specified unit price. If no orders are available to be matched due to a spread between buying and selling prices, orders will remain available for matching on the secondary market.

Once sell and buy orders are matched, the buyer has a hold placed on their wallet for the total matched amount based on the number of units & unit price. The buyer then has a period of time to fund their wallet with that amount.

Funds are transferred to the seller's wallet once the buyer's wallet has been funded for the matched buy order amount. Simultaneously, holding ownership is transferred to the buyer and will show in their investor portfolio on the Jasper platform. The transfer of funds and units can happen any time between an order being matched and settlement, providing the buyer's wallet is adequately funded.

Example transaction:

A seller want's to liquidate their holdings. The recent NAV per-unit price of the fund they own is $1.10, the seller owns 100,000 units. The predefined range in which they can sell their units is set to 5%, allowing them to place a sell order between $1.045 - $1.155. They select a unit sale price of $1.15 and place a sell order for the full 100,000 units.

There are two existing buy orders against the fund, one for 50,000 units at a maximum unit price of $1.2 and one for 200,000 units at a maximum unit price of $1.4. Upon placing the sell order, the system automatically matches the sell order with buy orders that meet the selling price. In this case, 50,000 units would be sold at $1.15 to the first buyer, and 50,000 at $1.15 to the second buyer. The second buyers remaining order of 150,000 units at $1.4 will remain on the secondary market after matching.


Important Disclaimers:

  • Jasper intends to establish secondary market functionality on its platform in the near future that will match buyers and sellers of units. However, there is no guarantee that this will occur or that you will be able to exit your investments on the secondary market or at what price an exit (if any) will be achieved. Units will not be listed on any public securities exchange. Investments offered by Jasper should be considered illiquid.

  • All information stated in this article is based on current knowledge and is subject to change prior to the public launch of the secondary market.

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