Supercompositeness Inspired From Superstrings
  String Unified Models based on the $k=1$ level of the Kac-Moody Algebra, predict the existence of ``exotic'' new states which carry fractional electric charges. We analyse the possibility of considering these ``exotics'' as preonic matter which can be used to form the families and the gauge group breaking higgs scalars. It is proposed that such a formation may occur provided that these states transform non-trivially under a non-Abelian gauge group with a relatively large rank in order to confine them at a sufficiently large scale. Such a situation is natural in string derived unified models, since the role of the confining group can be played by (part of) the Hidden symmetry. As an example, we present a string derived toy model based on the $SU(4)\times SU(2)_L \times SU(2)_R$ Pati-Salam gauge group. 
P. Dimopoulos, G.K. Leontaris and N.D. Tracas