The market for managed cryptocurrency funds is starting to gather momentum with the third fund in as many months announcing its entry into the market.
Every Capital is offering a couple of points of difference with its fund: it will be the first retail cryptocurrency fund in Australia, as opposed to a wholesale or sophisticated investor offering; and it is a hedge fund.
Every Capital’s head of communication Jack Baldwin says the hedge fund label means the fund will use a range of “financial tools”, such as short selling, in addition to investing in cryptocurrencies and initial coin offerings.
Being a retail fund means it will have a product disclosure statement registered with the Australian Securities and Investment Commission and accept relatively small investment amounts (the PDS is not out yet).
Every Capital is working in partnership with Global Merces, which will be its responsible entity and provide administrative services, and Astronaut Capital, an established crypto fund manager.
Baldwin says the Every portfolio will be based on a selection of the major cryptocurrencies and ICOs.
“We will be looking at industries where these assets have utility and value. We will be analysing the use case of the asset, the technology, liquidity and the team involved,” he says.
He says there is growing demand for cryptocurrency funds. “It is hard to do it on your own. There are so many currencies and ICOs. And even when you know what you want to invest in, getting access to exchanges is not simple. Security is another issue.”
Last month, the blockchain and cryptocurrency adviser DigitalX announced the formation of a new division, DigitalX Investments, and launched DigitalX Fund.
The minimum initial investment is $50,000 and minimum additional investment is also $50,000. Redemptions are monthly, with a minimum redemption amount of $25,000.
The DigitalX Fund will invest predominantly in the leading cryptocurrencies, with a smaller allocation to special trading opportunities, including initial coin offerings. Permitted investments of the fund include cryptocurrencies, ICOs, derivatives of cryptocurrencies and managed investment schemes.
According to its information memorandum, the investment manager’s philosophy is based on the view that cryptocurrencies and ICOs are under-researched, given their relatively recent emergence.
“Given this and the belief that speculative financial markets often deviate away from fair value, the manager believes significant opportunities will present themselves in the cryptocurrency asset class, which the manager will be able to take advantage of.”
And in March, Anti Hero Capital launched a managed cryptocurrency fund, the Anti Hero Capital Fund. According to the fund’s information memorandum, which was issued last month, its investment strategy is “an active investment program in crypto assets and blockchain technology.”
