TRACK RECORD 04 | StructuredFinance
Georgian Co-Investment Fund
Georgia / USA
Structured Finance in an Unproven Asset Class
Key Metrics
Equity exit:49x
IRR:49.9%
~4.9xBlended MOICNone
Equity Invested:The Situation
In 2014 BitFury, a US-based bitcoin mining company, approached GCF to finance the construction of mining facilities in Georgia using their proprietary chip technology. Cryptocurrency was an entirely unproven asset class. GCF was not prepared to take equity exposure to bitcoin mining in 2014 and structured both transactions accordingly.
My Role
Both transactions were structured as short-term loans with equity warrants – no equity was invested in either case. The loan structure capped downside to loan recovery while the warrants preserved unlimited upside. The loans were repaid quickly, leaving the warrants as free-carried positions with no remaining capital at risk. The second transaction included the establishment of a Free Economic Zone in Tbilisi to accommodate the expanded operation – requiring senior-level negotiation with Georgian government authorities to create new regulatory and physical infrastructure. GCF led that engagement entirely.
The Result
The warrants were exercised and the equity sold to a third-party buyer at 49 times the conversion value. The blended MOIC across both transactions, measured as total cash out against total cash in including loan capital, was approximately 4.9 times, with an IRR of 49.9%. The return was made possible by the structure, not despite it.
“In 2014, nobody knew what bitcoin was worth or whether the asset class would survive. We had no mandate to find out. So we structured both transactions as short-term loans with warrants – no equity, capped downside, unlimited upside. The loans were repaid. The warrants were free-carried. When we eventually sold, the equity had returned 49 times. That return was possible because the structure was designed first for the scenario where we were wrong.”
Track Record
Four transaction examples: Each one different in sector, structure and conditions.
Together they represent the range of work I have done and the standard I hold myself to.