By On August 30, 2019, Financial Times (FT) reported that Alan Howard, the founder and asset manager of Elwood Asset Management, plans to establish a $1 billion project. The venture will modify the portfolios of cryptocurrency funds for institutional investors.
Earlier this year, the firm in partnership with Invesco, an investment management firm had established a blockchain exchange-traded fund (ETF) on the London Stock Exchange.
Merging the Crypto Hedge Fund Space
Bin Ren, the CEO of Elwood, reported that this new project is aimed at helping investors choose quality Funds. Vetted crypto funds that have qualified sturdy due diligence to help market participants avoid all risks associated with the emerging sector. Ren believes that this is an excellent opportunity for growth and development.
Ren initially used to be the Chief Investment Officer at Brevan Howard’s Systematic Investment Group. He noted that screening of the sector had led to the identification of up to 50 crypto hedge funds by Elwood which has likely satisfied their due diligence.
Advantages of the New Crypto Hedge Fund
As the details of the product are yet to finalize, the new fund could allow investors to determine input factors such as the expected returns, the level of risk that they are ready to incur, and liquidity terms. It will also evaluate the potential correlation of the linked crypto hedge fund portfolio with their entire existing assets.
Financial Times pointed out that identification that most crypto investment vehicles lack the traditional qualities of the traditional hedge fund industry.
Product Could Finally Have $1 Billion Asset Under Management
The report cites research carried out this year by Elwood and Big Four auditor PriceWaterhouseCoopers. The study affirmed that crypto hedge funds charge a 1.72% management fee and a 23.5% performance fee. These charges are above the 1.41% and 16.6% respective averages for the traditional hedge funds industry.
According to the report, Elwood would initiate this service at an extra fee beside the fees that investors pay to access the underlying funds. Alan Howard told FT that he sees this as an incredible growth opportunity. He expects the product to manage more than $1 billion of assets.
The Elwood Asset Management new product will help institutional investors to steer the crypto hedge fund space. This move will see the cryptocurrency industry through incredible changes.
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