A prominent crypto asset management firm has recently announced that its assets under management (AUM) have surged to over $200 million, having experienced significant growth and now plans to introduce a new fund based in the Cayman Islands, accompanied by a feeder fund for US investors.
The firm has been recognized as a Commodity Trading Advisor (CTA) under the oversight of the National Futures Association (NFA). The newly established fund structure aims to enable professional institutions in the United States to invest in the firm’s quantitative trading strategies, offering a pathway for a broader range of investors to access these opportunities. Earlier this year, the firm reached the $100 million AUM milestone, managing over 50 self-managed accounts for institutional clients, showcasing its growth trajectory.
The firm’s CEO recently remarked that their innovative self-managed account solution has played a crucial role in propelling their growth to over $200 million in AUM. This success led to the realization that many family offices and allocators lacked the ability to invest in self-managed accounts. Hence, the firm decided it was the right moment to offer its proven Market Neutral strategy to a wider investment audience. This approach aims to generate returns with low volatility, providing a safeguard against broader cryptocurrency price fluctuations. Investors can contribute in various formats, including US dollars, Bitcoin, Ethereum, XRP, and Solana.
Targeting family offices, institutional allocators, and digital asset treasury companies, the firm aims to offer alternatives to the typical strategy of merely holding tokens. The assets under the new fund will be secured using the firm’s custody protection product, along with a unique off-exchange settlement system that minimizes counterparty risk.
Addressing institutional concerns regarding security and protection, the firm has partnered with a reputable digital asset custodian. This partnership enables the firm to offer segregated cold storage for client assets, thereby reinforcing their strategy to eliminate counterparty risks that have previously deterred institutional investors.
Investors will continue to benefit from a secure custody model due to this collaboration. They can now invest within a regulated and audited fund structure, which presents an exciting opportunity for both individual and institutional investors.
The utilization of a master-feeder structure, common among crypto investment funds, will help facilitate investments from both US taxable investors and international clients. This structure allows professional investors to navigate through familiar regulatory frameworks while still engaging with innovative digital asset strategies.
In response to past industry concerns, the firm developed its off-exchange settlement and custody protections following multiple high-profile collapses of cryptocurrency exchanges. Such incidents exposed vulnerabilities associated with the commingling of customer funds, prompting regulatory scrutiny.
The firm introduced its Quant Pro product to address these issues, employing a custodian model that protects client assets by keeping them separate from both the exchange and management company’s balance sheets. This strategic infrastructure reinforces clients’ security, ensuring their assets remain intact even in various unlikely failure scenarios.
The new fund requires a minimum investment of $100,000 from accredited and professional investors. It also offers clients the flexibility to change strategies once monthly without incurring additional costs and enables them to withdraw funds without the typical lockup periods found in traditional hedge funds.
Founded in 2016, the firm has solidified its presence in the industry by registering with both the CFTC and NFA as a CTA. It also holds a SWAP firm registration, managing over 40 institutional accounts, with aspirations to expand capacity to $500 million in AUM in the near future. This strategic expansion reflects the firm’s commitment to navigating the evolving landscape of the cryptocurrency market while meeting the needs of its clients.