Hosted by Hedgeweek and Institutional Asset Manager on 10 June, the DigitalAssetsLIVE Summit gave speakers and attendees the opportunity to discuss the key developments and trends driving the growth of institutional investment in digital assets.
Our Head of European BD for fund services, Karine Seguin, joined the panel of speakers at the event and provided some insights on the institutionalisation of the crypto space.
Asked about the trends to watch for, Karine commented: “Firstly, I would highlight the increased depth of the crypto manager talent pool. The experience and pedigree of the managers we speak with today compared to the managers we were seeing back in 2017 and 2018 has changed significantly. The managers back then were younger investors who had, to their credit, made money investing in crypto in prior years but had no other experience managing assets or working for asset management firms. They were tech entrepreneurs being persuaded by friends and family into opening a fund to replicate their prior success.”
“Today’s managers are veteran asset managers leaving firms that everyone would know, who have figured out how to apply to crypto tried and trusted strategies used with more traditional assets. Because of their relationships and track records built during their traditional asset management careers, they are able to bring those institutional investors along with them into the crypto space.”
“Secondly, the operational and regulatory set up of crypto managers is becoming more institutional; in this regard, we are seeing managers with stronger middle office, compliance and fundraising teams and that the majority of them are now opting to be under an onshore AIFM licence, in particular in the UK. “
“Finally, managers looking to set up a crypto fund are now in good hands as the ecosystem has considerably improved. As the recognition of crypto currencies as a valid asset class grows, so is the financial services environment around it also maturing, including regulations, security controls, legal structures, service providers, infrastructure and technologies. The more mature environment not only meets the growing needs of this increasingly popular asset class, but also gives increased comfort to more traditional investors who are new to the space. So whilst the bulk of the investor base for crypto funds remains family offices, conversations with traditional institutional asset allocators are now taking place on a far more frequent basis.”
If you want to learn more or discuss in more detail the institutionalisation of the crypto space, please contact either Karine (EU fund services) or Dan (US fund services).