Posted 2 years ago | by Ben Armstrong
Billion Dollar Crypo Fund Announced by Elwood Asset Management
Elwood Asset Management, the investment company owned by UK billionaire Alan Howard is planning to launch a new crypto investment fund, reports the Financial Times of London (FT).
The new fund would seek to connect institutional investors with cryptocurrency projects that undergo a substantial amount of vetting. There is substantial interest in this sector, but many institutions struggle to find crypto investments that work for their standards.
One aspect of the new fund that Elwood Asset Management is working to launch is due diligence, so that institutional investors have a good idea of the risks they are assuming when they invest in a cryptocurrency hedge fund.
Elwood Asset Management is Doing the Due Diligence
Bin Ren, the CEO of Elwood Asset Management, told the FT that Elwood had identified at least 50 crypto hedge funds that, “probably satisfy our due diligence.”
There was no mention of what a cryptocurrency hedge fund has to do to be considered as safe for investment by the new investment fund. It is expected that the new Elwood crypto fund will allow institutional investors to determine their level of risk tolerance in the crypto companies they invest in, and deploy capital accordingly.
Alan Howard has already made investments in other crypto related investments. He invested in the Bakkt fundraising earlier this year that raised more than $180 million USD. Bakkt is owned by Intercontinental Exchange (ICE), which also owns the New York Stock Exchange (NYSE).
Ren commented to the FT that he sees the potential for Elwood's new crypto fund to grow, perhaps to the level of more than $1 billion USD of assets under management.
Crypto Funds are Doing Well
The CFR Crypto Fund Index measures the performance of more than 40 crypto-focused hedge funds. It is outperforming both Bitcoin, and the S&P 500 when measured beginning in December of 2016.
Even with the crypto bear market of 2018, the CFR Crypto Fund Index is up by around 1,400% from December of 2016. Bitcoin is up slightly less, with a return of around 1,000% (or 10x) over the same time frame.
Crypto funds were likely able to scoot past Bitcoin because they are actively managed, and not just a simple result of market forces. The crypto fund industry is still young, but it is attracting the interest of mainstream investors.