the
tontine is the "
wolf pack" system for raising capital. individuals pool their money into a permanent common fund and receive dividend payments based on their investment and the fund's performance.
until death.
if a member of the wolf pack dies, his or her shares are divided among the rest of the pack. whoever outlives the rest of the pack takes the whole pot.
lorenzo de tonti created this system in italy and france during the
mid-17th century. it was later used by french, british, and u.s. governments for public initiatives, such as funding buildings and promoting life insurance sales. the state would recoup the capital pot once all the investors died.
since
tontines create a "live-er takes all" incentive, today, they are prohibited in most of the u.s. and britain; the french still use a limited tontine concept.
