Elwood Asset Management, an investment firm owned by British billionaire Alan Howard, is planning to launch a $1 billion venture to invest in crypto hedge funds.
In an interview with the Financial Times on Friday, Bin Ren, the chief executive of Elwood, revealed that the asset management firm is already in the process of developing the new platform which would tailor portfolios of crypto-based funds for institutional investors.
The new venture will offer the options to institutional clients with a tailored list of crypto hedge funds that would be vetted by the company and passed robust due diligence, thus minimizing the investment risks in the wild market of digital currencies.
Ren also revealed that the Elwood has already shortlisted 50 crypto hedge funds which. according to him, would “probably satisfy [the company’s] due diligence.”
The details of the new venture’s operation are, however, still unknown.
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Filling the void between crypto funds and investors
Elwood’s bid to jump in the business of the new asset class can be seen as its attempt to fill the gap between institutional investors and the crypto hedge funds which lacks the features and reach of the traditional hedge fund industry.
The move of Elwood to directly enter the crypto industry is not an abrupt one as the company is already planning to bring institutional clients to the new market for months.
Earlier this year, Elwood and PriceWaterHouseCoopers, a Big Four audit firm, conducted a research on the crypto hedge fund industry which revealed that crypto hedge funds charge an average maintenance fee of 1.72 percent, along with an additional performance fee of 23.5 percent.
Elwood, for its upcoming services, will charge a fee on top of the fees of the hedge funds just to give access to its curated portfolio.
In March, Elwood, along with investment management firm Invesco launched an exchange-traded fund (ETF) backed by 48 companies with investment in the development of blockchain technology at the London Stock Exchange.