"Please don't call this a lottery," he says. "Nobody calls Bonus Bonds a lottery."
He says the prizedraw is Global-e's chosen method of marketing the bonds and its associated Internet-based business.
While the idea of using prizedraws as a marketing tool is reasonably novel in New Zealand, it is a promotional tool used in the United States.
Overall, Global-e is looking to raise US$1 billion in its first bond issue. Although the company is based in New Zealand it expects to raise only about 10 per cent of the money here, the balance is likely to come from the Asian region.
The closest thing to Global-e in New Zealand is Bonus Bonds which is owned and managed by ANZ.
Currently Bonus Bonds, with about $2 billion under management, is the biggest unit trust in New Zealand, and it attracts significant annual inflows.
Markwick is hoping to see a reasonable amount of switching from Bonus Bonds to Global-e.
One adviser who quite likes Global-e is Christchurch-based Kevin Seque. He sees Global-e as being an updated, and better version of Bonus Bonds.
While Global-e isn't likely to be something that is used in portfolio building, it will be used for people who had a bit of spare money (minimum investment about $2000) and wanted a "punt".
Markwick says the company deliberately chose to use advisers as its preferred distribution channel in New Zealand, and he would like to see "a little bit" of Global-e included in a balanced portfolio.
Although the company is selling bonds (offering 1 per cent a year over 20 years), Global-e is more appropriately considered as an equity investment, he says
It's an equity investment as the bondholders get options for in Global-e's dom.com company when they invest.
Global-e chairman and chief executive Damian Archbold admits the promoters aren't leading experts in the e-commerce world, however they believe the plan will work.
Archbold says instead of setting up a website then trying to attract customers, Global-e is going to have a sizeable group of customers (bondholders), and a lot of cash which it can use to build a website.
For more on Global-e go to the Special Reports section
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