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Permuto Capital
In a move that could revolutionize the world of investing, Permuto Capital is inching closer to launching a new class of equity securities that promise to unbundle the dividend from the remaining equity value of common stocks. The pioneering products, built upon an optional blockchain solution using the Chia blockchain, are poised to attract a wide range of investors seeking innovative ways to construct their investment portfolios. The concept was first introduced in Dividend Alchemy: Unbundling Microsoft’s Equity With Blockchain.
Product Summary
On February 28, 2025, Permuto Capital took a significant step forward by filing two new registration statements for products based on Apple (AAPL) and Broadcom (AVGO) common equity, adding to their previous filing for Microsoft (MSFT). This financial innovation separates a common share into two distinct, tradable parts: a “Dividend Certificate” entitling the owner to dividend payments, and an “Asset Certificate” representing everything else.
The Dividend Certificates offer a capital-efficient way to generate income with favorable dividend tax treatment, making them attractive to retirees, pension funds, insurance companies, and other cash flow-focused investors. Meanwhile, the Asset Certificates are expected to trade with “natural leverage,” assuming the dividend component maintains a relatively steady price based on the present value of future cash flows.
Financial Innovation
While the concept of separating dividends from other economic elements of a common share is not new to Wall Street, the Permuto Capital approach stands out. By designing an affordable structure accessible to investors of all levels, they are democratizing a strategy once reserved for large institutional investors executing bespoke trades.
The simplicity of the Permuto solution is reassuring: all certificates are backed 1:1 by shares of the underlying company held in a trust, without complex financial engineering or synthetic elements. One advantage of the use of trust is that the certificates are not time-based like synthetic structures, and therefore investors may enjoy ongoing access to the certificates. Investors can transact in either or both certificates, deposit common shares with a custodian to receive the two certificates, or return both certificates to the trust to reclaim a common share.
Blockchain technology for cost reduction
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Permuto Capital aims to list both certificate types on a national stock exchange, with the Depository Trust Company (DTC) holding them for investors using traditional platforms. However, those seeking to maximize returns can opt to hold their certificates as Chia Asset Tokens (CATs) on the Chia blockchain, which offers cost-efficient dividend distribution. CAT holders will receive a great share of dividend payments compared DTC-held certificates with Permuto passing on the cost savings from using the blockchain.
The Chia blockchain also enables 24/7 trading on decentralized marketplaces, free from exchange halts and potentially more cost-effective than traditional exchanges.
Looking Forward
As regulatory approval progresses for products tied to Microsoft, Apple, and Broadcom, Permuto Capital Co-CEO Trent Martensen affirmed their commitment, stating, “We have no intention of slowing down and expect to be filing additional registration statements for more trusts in the coming weeks.”
The Permuto Dividend and Asset Certificates could represent the first new investible asset class available to the public since the creation of Bitcoin. By elegantly separating two components of a publicly traded stock, this simple idea unlocks additional investor demand, as the individual components cater to specific needs and enable more precise portfolio construction. As Permuto Capital continues to push the boundaries of financial innovation, the investment landscape may never be the same.
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