edly – The ISA Marketplace

The Outcomes Strategy
NEW Managed Account option: edly allocates invested funds across ISA pools for a diverse mix of schools, industries, and geographies.

Place Order

WHY WE LIKE THIS OPPORTUNITY

All investment offerings are guided by our Investment Philosophy

What is Outcomes Strategy?

Outcomes Strategy is a ‘managed account’ option for investors to participate in ISA investing. edly allocates investments to an investor in securities evidencing cash flows from a variety of ISA pools with a diverse mix of schools, industries, and geographies.

Outcomes Strategy provides investors with diversified ISA investment securities backed by (i) pools of ISA contracts, and (ii) loans to schools backed by ISA contracts. As an alternative to a single investment directly in an ISA pool or ISA-backed loan, the use of a managed account allows investors to minimize risk by diversifying. This method for investing in ISAs is available exclusively through the edly platform.

How does it work? How are funds allocated?

Outcomes Strategy accounts will be actively managed by edly. Asset allocation will be focused on monthly income generation and diversification. edly assembles diversified investments by applying investor funds across ISA pools from different schools that have varying geographic and industry placements. Outcomes Strategy accounts are intended to provide a convenient way to diversify your edly participations.

In the above example, the managed account portfolio is made up of 7 different pools:

2 different coding schools addressing different employer needs (e.g., data science and information technology, respectively)
2 universities (e.g., engineering and education students)
2 vocational schools (e.g., training welders and diesel mechanics)
1 healthcare training school (e.g. nurse technician)

How are investors protected?

Underwriting adheres to edly’s Guiding Principles and Investment Philosophy. Since ISAs are a new asset class, conservative modeling assumptions are applied to ensure proper alignment between the school and investor. Offerings are structured in a way that protects investors from risk while rewarding schools for strong student outcomes. Investors are protected in the following ways:

Direct investment in the assets
edly makes investments in the actual ISA assets (contracts with the students) or in loans to schools backed by ISA assets. This gives us the contractual right to the cash flows generated by the students upon employment.
Experienced ISA servicers
edly hires a third party servicer who collects the payments from the students. edly only works with servicers it believes can effectively service the assets.
School "skin in the game"
edly requires school “skin in the game” during the underwriting process – we only make partial advances to schools and then our investors are in a senior position to the schools until investors have received a preferred rate of return.

In order for the schools to get their full tuition, students must have good outcomes and investors must have good investment returns. Schools with poor historical outcomes are avoided or removed from our program.

What are attractive features of the investment?

Diversification

Monthly cash flows

Investors receive distributions on a monthly basis.

Tax Reporting

Distributions are considered return of capital until the original basis has been recovered. Distributions in excess of basis will be reported on a 1099 MISC during the year of the distribution. Or, as interest income if structured as a loan to the schools.

Short Maturity

edly targets 4-year duration and seeks to return all investor money within 5 years.

Investment Reporting & Monitoring

edly makes distribution and performance reporting available each month so that investors can monitor ongoing performance of pools in their portfolio.

The schools listed below are SAMPLE schools for a SAMPLE Outcomes Strategy managed account portfolio.

Sample school and ISA data is in this offering to provide visibility into the types of schools edly includes in the Outcomes Strategy managed account, and the data that is associated.

WHAT ARE THE ASSETS BACKING MY INVESTMENT?

How ISAs work:

Instead of taking out a loan, students agree to pay a fixed percentage of their earnings for a fixed number of months, which customarily ranges from 24 to 120 months (but can be more or less). Students are obligated to make a monthly payment only if they are working in that month and earning more than a specified minimum salary, which typically ranges from $25,000 to $60,000

For example, a student may have to pay 10% of their earnings each month for 48 months, but only if they earn over $45,000 per year. Payments are also subject to a total cap on payments– for example, the student won’t need to pay more than 1.4 times the tuition (sometimes caps are higher or lower than that multiplier).

There is also a payment obligation window after which the student no longer has any obligation to make further payments, regardless of the number or amount of payments made. So, if the student doesn’t get a job within a certain number of months after graduation (typically 60-120 months) the contract is done and the student does not owe anything.

All edly ISAs adhere to edly’s Investment Philosophy:

edly seeks investments in ISAs which we believe are likely to produce high risk-adjusted returns for investors while also providing access to education for promising students.

Our approach is systematic and can be applied to any higher education program. Our screens typically only allow us to invest in the best 20% of the possible higher education programs.

edly analyzes the historical outcomes of students as captured in data about the schools, the area of study, and geography. We look for an attractive relationship between the tuition of the program and the student outcomes. The higher the “ROSI” (Return on Student Investment) the more attractive it is to edly.

Important historical outcomes we consider include:

Graduation Rates
Time to employment
Employment rate
Starting Salaries
Salary Increases over time
Non payment rate

edly works with the schools to ensure there is alignment of interest among schools, students, and investors. We should all succeed if students succeed.

edly seeks high impact investments – we believe that students of all backgrounds can be successful with the right access to education and resources and therefore we will NOT use wealth-based credit scores such as FICO. We believe our own methods are more predictive of success than credit scores.

HOW DO I GET PAID?

Investors receive monthly distributions on the 25th (or the following business day if it is a weekend or holiday) of each month. Distributions contain the pro rata share of ISA cash flows (net after servicing and management fees) from all pools in an investor portfolio.

How does Outcomes Strategy differ from investing directly in current edly offerings?

Outcomes Strategy accounts are managed by edly on behalf of the investor. These accounts are assembled to maximize diversification and minimize risk on behalf of the investor.

What is the investment duration, and is liquidity an option?

The expected duration is 48 months, which is determined by modeling of the cash flows.

What fees and expenses are associated with the investment

Managed accounts allow edly the flexibility to rebalance assets in order to maximize income generation. There are fees and expenses associated with investment:

Management fee: 4% of ISA cash flows
For example, if an investor invests $10,000 in the strategy, over a 4 year period, if they received total cash flow of $15,000, then edly would earn fees of $600. These fees would be paid monthly as investors get cash returned from the strategy.

The data below is SAMPLE cash flow data for a SAMPLE Outcomes Strategy managed account portfolio.

This graph does not take into consideration edly’s targeted 4 year final termination date. Any remaining investments after 4 years will be liquidated on behalf of investors.

Registered investors can place an order by clicking the button to the right. If you are not a registered investor we will walk you through the registration process.

Place Order

KEY TERMS

CASH FLOW TERMS

IRR Hurdle Rate. 14.28%

Investor Split (After Return Hurdle). 32.59 %

School Split (After Return Hurdle). 67.41 %

OTHER TERMS

ADDITIONAL INFO

Outcomes Strategy is a ‘managed account’ option for investors to seamlessly participate in ISA investing. edly allocates investments across ISA pools in a diverse mix of schools, industries, and geographies.

Outcomes Strategy provides investors with diversified ISA investment portfolios backed by (i) pools of ISA contracts, and (ii) loans to schools backed by ISA contracts. As an alternative to a single investment directly in an ISA pool or ISA-backed loan, the use of a managed account allows us to minimize downside risk more so than before. This method for investing in ISAs is available exclusively through the edly platform.

ISA INFORMATION

Number of ISAs
Minimum Threshold Salary
Payment Window
Income Share
Number of Payments
Average School Payment Cap

604
$38,571
86
11.86%
55
$37,429

DOCUMENTS

Please read the important investment documents linked below as you access this opportunity.

Edly Inc. Investment Management Agreement Discretionary Account 200401.pdf

Edly EFS Offering Memorandum for Series Interests in Income Share Agreements 12.10.pdf

Series LLC Agreement.pdf

Master Participation Agreement.pdf

CONTACT INFO

edly LLC | 555 Pleasantville Road, Suite N202 | Briarcliff Manor, NY | 10510
Phone: (914) 775-8299 | Email: info@edly.info

DISCLAIMER

From time to time, edly will make opportunities for investments in ISAs available to investors who are qualified as “Accredited Investors” (as defined below) and who have expressed an interest in learning about such investment opportunities. No investment opportunity is being offered at this time by edly and all prospective investors will be given opportunities in the future after verification of their status and an expression of specific interest.

When investment opportunities are being offered, a Confidential Private Placement Memorandum (a “PPM”) will be furnished to approved investors on a confidential basis. Sales of the securities may not be consummated unless prospective investors are provided with a PPM. In particular, you should carefully read the “Risk Factors” set forth in the PPM.

The information contained in the PPM may not be provided to persons who are not directly concerned with an investor’s decision regarding the investment offered hereby. Investors should make their own investigations and evaluations of any securities offered. The securities, when offered, will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws. They will be offered for investment pursuant to the exemption from registration provided under Section 4(a)(2) of the Securities Act and exemptions from the registration requirements of applicable state securities laws only to persons who are “Accredited Investors,” as defined in Regulation D under the Securities Act. There will be no public market for the offered securities.

This website, and the information being provided to prospective investors at this time, is not an offer to sell or a solicitation of an offer to buy any securities that may be offered in the future by edly, nor shall any such securities be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

ANY SECURITIES OFFERED BY EDLY WILL NOT HAVE BEEN RECOMMENDED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.

ANY SECURITIES OFFERED BY EDLY WILL BE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT IN THE SECURITIES FOR AN INDEFINITE TIME.

CERTAIN INFORMATION CONTAINED IN THIS WEBSITE AND IN THE PPM TO BE DELIVERED IN THE FUTURE CONSTITUTES AND WILL CONSTITUTE “FORWARD-LOOKING STATEMENTS,” WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “EXPECT,” “ANTICIPATE,” “ESTIMATE,” “INTEND,” “CONTINUE” OR “BELIEVE” TO THE NEGATIVES THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. DUE TO VARIOUS RISKS AND UNCERTAINTIES, ACTUAL EVENTS OR RESULTS FROM THE ACTUAL PERFORMANCE OF THE SECURITIES MAY DIFFER MATERIALLY FROM THOSE REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS.

The Outcomes Strategy