# US 2010/0169236 A1 · Multi-Level Leverage Account Structure > Agents: this data is available as JSON from the patentgrep API and MCP server — see https://patentgrep.com/llms.txt - Number: US 2010/0169236 A1 - Document ID: US20100169236A1 - Status: Published application - Kind: A1 - Application number: 12/565,502 - Filed: 2009-09-23 - Published: 2010-07-01 - Earliest claimed: 2006-06-26 - Assignees: Merrill Lynch Global Markets & Investment Banking - Inventors: Henry Bregstein; Renatus Rolandus Adrianus Paulus Van Kesteren; Mark Willis - Web page: https://patentgrep.com/patent/US20100169236A1 ## CPC - G06Q 40/06: Asset management; Financial planning or analysis - G06Q 40/00: Finance; Insurance; Tax strategies; Processing of corporate or income taxes - G06Q 40/04: Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange - G06Q: INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR ## Abstract An investment structure for multiple classes of investors that combines the advantages of both the master feeder structure and the reverse master feeder structure with segregated accounts. In particular, an investment structure is formed in which investors invest in a common fund. The common fund, in turn, opens a common prime brokerage account, having at least three sub-accounts, for example: an unlevered account; one or more levered accounts and a general trading account. The prime broker provides class loans to the levered account and margin loans to the general trading account. To the extent class loans are provided to the levered account, levered investors will participate in the returns on the general account as if the levered investors invested capital plus the amount of any class loans to that levered account. The unlevered investors will participate in the returns on the general trading account on the basis of their capital contributions alone. The prime broker will have no recourse against any assets of any account other than the levered account as a result of a default or margin call of the levered account. In an alternative embodiment of the invention, the investment structure is structured as a fund of funds, in which multiple classes of investors invest, which, in turn, invests in multiple investment funds, or a fund that employs alternative investment strategies that overlay the basic trading strategies. In this embodiment, a credit facility is established with the equivalent of three sub-accounts as discussed above. ## Claims ### Claim 1 A method for forming an investment fund, the method comprising the steps of: (a) forming a fund for receiving contributed capital from at least two classes of investors, selected from the group of either levered and unlevered investors or multiple classes of levered investors; and (b) opening a prime brokerage account by said fund for receiving said investment capital from said fund for use in acquiring securities, said prime brokerage account formed with at least three sub-accounts including an unlevered account (if there is a class of unlevered investors), one or more levered accounts and a general trading account, said prime brokerage account configured to receive two levels of leverage from a prime broker in the form of class loans to said levered account and margin loans to said general trading account. ### Claim 2 (depends on 1) The method as recited in claim 1, further including the step of configuring the account to receive contributed capital from at least one class of unlevered investors. ### Claim 3 (depends on 2) The method as recited in claim 2, further including the step of configuring said prime brokerage account with an unlevered account for said unlevered investors. ### Claim 4 (depends on 3) The method as recited in claim 3, further including the step of configuring said prime brokerage account so that said levered investors share in the returns of the general trading account on a pro rata basis, as determined by including in such calculation any class loans made to said levered account. ### Claim 5 (depends on 4) The method as recited in claim 4, further including the step of configuring said investment structure by way of a single prime brokerage agreement. ### Claim 6 (depends on 1) The method as recited in claim 1, wherein said at least two classes of investors includes one class of levered investors and one class of unlevered investors and said prime brokerage account is configured with one or more levered accounts and an unlevered account. ### Claim 7 (depends on 1) The method as recited in claim 1, wherein at least two classes of investors includes two classes of levered investors and said prime brokerage account is configured with a levered account for each class of levered investors. ### Claim 8 A method for creating a fund with multiple levels of leverage, the method comprising the steps of: (a) creating a master fund configured to receive investment capital from at least one class of unlevered investors and one class of levered investors; (b) creating a prime brokerage account for use in acquiring securities formed with at least three sub-accounts; an unlevered account; a levered investor account and a general trading account, said prime brokerage account configured to automatically provide class loans to said levered account as a function of the investment capital invested by said levered investors; said general trading account further configured to provide a second level of leverage to said general trading account as a function of the contributed capital in said levered account and said unlevered accounts. ### Claim 9 (depends on 8) The method as recited in claim 8, further including the step of configuring said investment fund by way of a single prime brokerage agreement. ### Claim 10 (depends on 9) The method as recited in claim 9, further including the step of configuring said prime brokerage account so that said levered investors share in the returns of the general trading account on a pro rata basis, as determined by including in such calculation any class loans made to said levered account. ### Claim 11 A method for forming an investment fund comprising the steps of: (a) establishing a master fund for receiving at least two classes of investors; (b) enabling said master fund to open a prime brokerage account; (c) forming said prime brokerage account for use in acquiring securities with at least three sub-accounts--an unlevered account, a levered account and a general trading account; and (d) configuring said prime brokerage account so that said levered account receives class loans from a prime broker as a function of the contributed capital in said levered account and margin loans from said prime broker as a function of the total capital in said general trading account. ### Claim 12 (depends on 11) The method as recited in claim 11, wherein said investment fund is created with a single prime brokerage agreement. ### Claim 13 A method for forming an investment fund, the method comprising the steps of: (a) forming a fund of funds for receiving contributed capital from at least two classes of investors, said fund of funds investing in one or more investment funds; or a fund that employs alternative investment strategies that overlay the basic trading strategies and a (b) opening a credit facility by said fund formed with the equivalent of at least three sub-accounts including an unlevered account (if there is a class of unlevered investors), one or more levered accounts and a general account, said credit facility configured to provide two levels of leverage in the form of loans to said levered account and loans to said general account.