Supercompositeness 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) x SU(2)(L) x SU(2)(R) Pati-Salam gauge group.