Royalties Basics

An Episode of Asia-Pacific Business Strategies, a series broadcast by ThinkTech Hawaii

Arthur Lipper and the Basics of Revenue Royalties Finance

Legendary Wall Street financier, with Royalties 101: alternatives for financing growing companies without equity or debt

Interview by Michael North, Asia-Pacific Group and China Royalties

Arthur Lipper is a leading innovator in the field of financial services, with more than five decades of experience in world financial markets. Through the Lipper Index, and the international Lipper Fund Performance Awards, he pioneered breakthroughs in the fields of mutual fund analysis, stock index futures and mutual funds.

He is a leader of the field of royalties finance, and has published a number of analytical tools to help investors and business owners understand their potential. Arthur is involved with a number of efforts to initiate funds, partnerships, and public securities exchanges focused on revenue royalties.

This interview covers Royalties 101, and is specifically for potential issuers — companies that wish to receive capital through revenue royalties.

Mr. Lipper formed two New York Stock Exchange member firms, Arthur Lipper Corporation and New York & Foreign Securities, and served both as Chairman. These firms specialized in serving institutional investors, and their services included the creation of mutual fund investment performance analysis. They were members of all of the major U.S. securities exchanges, and a number of commodity futures exchanges, and transacted hundreds of millions of dollars of business. He has also advised stock and commodity futures exchanges, including Mid-America Commodity Exchange and Bourse de Beyrouth.

In 1969, Arthur Lipper Corporation filed the first prospectus for a Stock Index Fund and subsequently conceived and initiated trading Stock Index Futures. The company had offices in New York, London, Washington, Amsterdam, Geneva, Buenos Aires, Singapore and Tokyo, and was actively involved in Australia.

Arthur Lipper Corporation invested in privately owned companies, including Venture Magazine, where Mr. Lipper served as Editor-in-Chief. He has lectured at many prominent universities, including Harvard, Yale, Stanford and Georgetown.

In 2007, Mr. Lipper was awarded a U.S. patent covering the Comparator service for investment managers. Comparator allowed users to uniquely review and manage portfolios based on the relative weighting of holdings. In 2010 he was awarded a patent for an approach to using revenue royalties in the financing of companies. In 2013 he filed another patent covering the combination of debt and royalties.

Arthur served in the U.S. Marine Corps, receiving a Purple Heart in Korea.

Summary:
For companies with a demonstrated ability to grow their topline revenues, there are alternatives to conventional venture capital, private equity, bank or other forms of debt. This interview introduces interested companies to the potential usefulness of revenue royalties and how to implement them.

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Asia-Pacific Group

Reference websites:
Pacific Royalties
Royalties.website