A San Francisco-based manager has launched what it claims to be the world’s first “tokenised cryptocurrency-focused fund of hedge funds”
the Apex Token fund, will invest in a selection of cryptocurrency hedge funds. Investors can buy into the fund by buying Apex tokens, that are registered no the Ethereum blockchain. Apex said that this offering would bring “investment in this emerging asset class into the mainstream”. It is targeting the fund at retail investors, who it says can use the fund of hedge fund approach to access portfolios that otherwise would require a high minimum investment or commitment to multi-year lock-in periods for those investing directly.
Investing in a basket of assets denominated in cryptocurrencies also brings diversification advantages, Apex said, including the tendency for low correlation to exist between such currencies and traditional assets. The tokens that are acquired to buy into the fund are themselves tradeable “on any exchange which chooses to list them”. Tokens can be exchange directly through peer to peer transactions also; each time a token is bought or sold it is recorded on the Ethereum blockchain. Blockchain technology serves as an online distributed ledger.
Tokens will be available for sale starting in March 2018, Apex said, and can be bought through its own website. The minimum investment is set at 0.1ETH, a cryptocurrency worth some $862 at the time of the announcement. Apex tokens will initially be priced at $1, the manager said, and it will only be available to non-US investors.
Apex notes that it will not collect fees from investors after tokens are distributed.
“The fund will only charge an initial upfront fee to cover administrative and management costs throughout the lifecycle of the fund.”
Christopher Keshian, managing partner of the Apex Token Fund, said: “The Apex Token Fund uses technology which will unlock liquidity, manage volatility and lower barriers to entry for a larger market of global investors.”
“We believe that the best way to build a portfolio in the crypto-asset space is by diversifying investment strategies and fund managers. Furthermore, we believe we have the technology, data, and experience to balance these strategies in a portfolio that maximizes exposure to the most promising strategies while hedging risk over many market conditions.”