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Blue Chip Euro Focus Fund: 7.0% Dividend Yield + Capital Appreciation
The Fund's investment objective is to seek ongoing capital appreciation by investing
in the acquisition and development of European gaming and sports betting licenses,
turnaround situations, and new development projects. The geographic centre is the
Balkan and Adriatic region which is currently experiencing excellent growth.
This region reported an estimated €25 billion market with €4.5 billion in gross
revenue after payouts in 2007 (source: MCN study Dec.08).
The market will see considerable growth
in the foreseeable future with the continued liberalization of the European
gaming and lottery sector. Our experienced management team is well postioned to
capitalize on these opportunities.
Each opportunity will be chosen by the Investment Manager.
In 2009, Blue Chip acquired a major sports betting company
headquartered in the Balkan region. The acquired betting company has over 200
locations and 450 employees. Within three years our management team increased
profits by over 100%. Moreover, through synergies related to this acquisition,
Blue Chip has invested in other related companies including new gaming and sports
betting licenses. Related to this activity has been the acquisition of the region's
dominant fiscalization company which as of 2011 has grown to account for over 40%
of the fiscalization market.
The Concept
The acquisition of the sports betting company has become the cornerstone of our
monetization efforts in the region. Through our guidance and in house expertise, the
R&D team created the software for the gaming components of the system including
the technology required for the cash handling component. The Blue Chip owned companies
have developed an innovative gaming machine which accepts "pay-in" and "pay-out" just
like an ATM machine for approximately €4,000. By comparison, similar type of machine
in the market would sell for between €9,000 to €11,000.
These machines can be located in cafes and pubs away from bet-shop locations, making
the cost of servicing minimal. We successfully installed 160 of these machines during
fiscal 2011. Some of these machines have been tested and validated for over a year, and
they have been proven to be very profitable. Currently, our real time monitoring is
showing an average income of €500 to €600 per month per machine. Currently our sports
betting and gaming companies are in the process of installing another 300 to 400 units.
We expect this process to be completed by 2nd quarter 2012. Our strategic acquisitions,
R&D efforts, and strong regional contacts have made us a dominant player that is
positioned for rapid growth in the next several years.
The Opportunity
Recently we exhibited this new machine at a trade show in Bulgaria (Oct.17-20) and the
response was outstanding. Conservatively 2,000 machines could be installed immediately
in the Balkan region. The market potential is however much greater, we believe that
with a strong marketing effort we could install upwards of 10,000 machines in the
region. The potential profit to the dominant player in the Balkan region is significant.
Profit Calculation
- cost per machine €4,000
- cost of logistics of installation is less than €1,000
- profit per machine minimum €500/month, €6,000 annually
- operations, commissions, back office and taxes €200-250/mo.
= net profit per machine €250-300/month, or €3,000-3,600 annually
Ongoing Income
Blue Chip intends to finance a new company to install a minimum of 2,000 machines in the
Balkan and Adriatic regions where we already have commitments for installations:
Croatia, Romania, Serbia, Greece, Bulgaria, Hungary, and Montenegro. While 2,000
machines is a minimum, there is an opportunity to install over 10,000 machines in
the entire Balkan region. Due to recent European court decisions, this opportunity
will also extend to Germany, France, and Italy in the next 12 months.
Compliance and Reporting
Access to all real-time income details from the existing machines at the head offices
of our gaming and sports betting companies in the Balkan region are used as the base
for all compliance and monitoring. Throughout the entire region, all new installations
can be monitored in the same fashion. All compliance and reporting to investors is
available in a real-time fashion through our secured website access.
Safety of Funds
As a fiduciary precaution:
1) the Investment Manager has the authority to make investment decisions but does not have check-signing authority on The Fund's bank account or the power to enforce the provisions governing the Fund;
2) the Directors have the authority to enforce the provisions governing the Fund but do not make investment decisions.
The Bottom Line:
- Current and ongoing income.
- Capital preservation through acquisition of hard assets.
- Minimum before-tax profits of 50% annually on current installations. **
 TermSheet
If you wish to invest, please
contact us
for a Subscription Agreement.
The minimum investment is €25,000.
* All documents require Adobe Acrobat Reader for viewing
** Income verified for the current installation of 160 machines
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