M·CAM, Swiss Firm Join to Insure Intellectual Assets

Date:  Fri, 2000-09-08

By: Reed Williams The Daily Progress September 8, 2000 M·CAM Inc. said Thursday a new partnership provides the financial backing and cachet it needs to convince banks it can turn companies’ intellectual property into hard assets to be used as loan collateral. David Martin, M·CAM’s founder and chief executive officer, said the Charlottesville firm has teamed up with Swiss Re New Markets, a division of Swiss Reinsurance Co., to value and insure companies’ intangible assets. “It is going to provide a new form of far-less-expensive capital than has been available to rapidly growing and well-established companies,” he said. “They just don’t have [conventional] collateral.” M·CAM will use its largely automated asset valuation model to put a price on these assets, Martin said. Companies will go to the bank and apply to have their intellectual properties, like patents or copyrights, analyzed by M·CAM in hopes that the bank can lend against them. If a company goes bankrupt and can’t repay a loan, M·CAM and Swiss Re New Markets cover the expense and seize those assets, perhaps reselling them or otherwise capitalizing on their worth. This way, at least in theory, the bank would recoup its investment. “We have carefully considered all angles of this highly complex risk and have created a coverage facility that will help enable M·CAM’s [intellectual property] asset collateralization to become commerical reality,” William Hoffman, associate director of Swiss Re New Markets stated in a news release. Robert A. Moorefield, area president of SunTrust Banks Inc., expressed interest Thursday in using M·CAM’s model. “Our bank has looked at the concept for underwriting intellectual property,” he said. “We like it, and we think it has merit. We think that at a point in time in the future we can make the concept work.” For the past several months, M·CAM has been working to establish credibility for its nascent concept in the eyes of banks. M·CAM announced in February that Marsh USA Inc., a risk-management firm, backed its model. Marsh USA is a subsidiary of New York-based Marsh & McLennan Cos., a Fortune 500 insurance company. In June, M·CAM announced San Diego-based Science Applications International Corp., which sells information-gathering and systems-integration technology, would consult M·CAM in intellectual property matters. “It’s a good time to be a private company,” Martin said. “We have been willing to move more efficiently to partner with big companies at a time when some [public] companies are responding to market frustrations out there.”