A new fund that will invest in cryptocurrency has been launched with an ultimate AUM target of $300 million. Alphabit, which the private fund is called was co-founded by Liam Robertson, a former currency trader at hedge fund Light Peak Capital in London. Mr. Robertson shared the plans this past weekend with Gertrude Dreyfuss, a Thomson Reuters FX and Treasuries reporter.
The total cryptocurrency market capitalization has climbed more than 60% so far this year, and approximately 260% over the past 12 months, to a now-estimated $30 billion at the time of writing.
A few digital currency only investment funds have emerged over the past year, including Polychain Capital, which has raised over $10 million from venture capitalists and investors in the last few months. Polychain Capital will manage a hedge fund that invests in a diversified portfolio of blockchain tokens.
Liam Robertson told Reuters:
“As you see the digital currency market progress and grow, we have seen professionals come to the market, allowing the sector to become a more streamlined and professional space. The sector is now in a great position to further strengthen and grow.”
“We would be very surprised if we don’t return at least 100% for the year.”
Alphabit will operate as a cross between an open-ended mutual fund and a hedge fund. The fund started with an initial seed capital of $1 million raised among the founders and company executives, said Robertson, who is also chief executive and head of investments.
When the fund has a six-month track record anticipated by September 2017, is when the formal launch will take place debuting at an investment conference in China.
Fees will comprise 2.5% for management and 45% for performance. The performance fee will only apply if the fund outperforms the price of bitcoin.
Alphabit will use a combination of active strategies including leveraged trading, algorithmic systems, and investing in the sale of ICOs, Robertson told Reuters. Due to the diversified approach, Robertson believes these strategies will help the fund outperform bitcoin with lower volatility.
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