A notable growth has been reported by a crypto asset management firm, which has successfully increased its assets under management (AUM) to over $200 million. In a strategic move to enhance investment options for US institutional investors, the firm is set to launch a new fund based in the Cayman Islands that includes a US Feeder structure.
This company, recognized as a Commodity Trading Advisor and registered with the National Futures Association, has achieved significant milestones, including surpassing the $100 million AUM mark earlier this year. Previously managing over 50 accounts directly for institutional clients, it has now doubled its AUM, indicative of its burgeoning influence in the crypto asset space.
Key to this firm’s success has been its self-managed account solutions, which have attracted institutional investments. However, it has also recognized a challenge: many family offices and allocators lack the mandate to invest in self-managed accounts. This realization resulted in the decision to make its well-established Market Neutral strategy accessible to a wider array of investors.
The forthcoming Cayman fund will employ a Market Neutral strategy designed to produce returns while maintaining low volatility, regardless of the fluctuations in the broader cryptocurrency market. Investors will be able to contribute in various forms, including US dollars, Bitcoin, Ethereum, XRP, and Solana.
The firm’s target audience includes family offices, institutional allocators, and digital asset treasury companies seeking alternatives to holding tokens directly. Fund assets will be secured through a dedicated custody protection product, while trading will be executed via an off-exchange settlement system that aims to minimize counterparty risks.
In addressing potential concerns from institutional investors regarding asset custody, the firm has entered a partnership with a reputable digital asset custodian. This partnership ensures that client assets are stored in segregated cold storage, bolstering security and trust. This move aligns with the firm’s prior introduction of the Quant Pro product, which aims to eliminate counterparty risks that have historically plagued institutional participation in the crypto market.
Investors will benefit from this custody protection model, along with the assurance of a regulated and managed fund structure. The master-feeder setup, now a common feature in the investment landscape, will facilitate exposure to digital asset strategies for professional investors while adhering to familiar regulatory frameworks.
In light of recent high-profile collapses within the cryptocurrency exchange sector, including the failure of a prominent exchange in 2022, this firm has been proactive in developing infrastructure that enhances safety and assurance in their operations. By utilizing an off-exchange settlement approach, the firm has sought to safeguard client assets effectively, hence increasing confidence among its investor base.
Minimum investment requirements have been set at $100,000 for professional and accredited investors. Flexible strategy changes and the absence of lengthy lockup periods also enhance the investment proposition compared to traditional hedge funds, making it appealing to a broader audience.
Since its inception in 2016, the firm has established a solid footing in the crypto asset management domain, currently overseeing more than 40 institutional accounts. With ambitious growth plans, it aims to scale its capacity dramatically, targeting $500 million in AUM in the near future.