· February 3, 2018 · 5:00 am
Two Ex-BlackRock Managers to Launch Cryptocurrency Hedge Fund
Two of BlackRock’s fixed-income managers have resigned from the world’s largest asset manager to launch a cryptocurrency hedge fund.
The two BlackRock ex-managers are Adam Grimsley, who was a fixed income specialist for eight years, and Michael Wong, who was the senior portfolio manager and head of fixed income asset allocation, are launching a called Prime Factor Capital.
Grimsley and Wong are partnering with Nic Niedermowwe, an Oxford Maths PhD. He will serve as the chief executive, while Wong and Grimsley will head up as CIO and Head of Investment Solutions, respectively.
Michael Wong, Nic Niedermowwe, and Adam Grimsley
Niedermowwe hopes to gather a total of £10m in assets (equivalent to $14 million) under management and intends for Prime Factor Capital to become the BlackRock of crypto asset managers. He goes on :
Regulation is still in its early stages but it is evolving rapidly, and we are working with regulators to ensure we are ahead of the game.
This announcement comes after the six largest asset managers for not investing in bitcoin. Despite the steady growth, these market players are more concerned with the “bubble” label slapped onto bitcoin by critics.
Cryptocurrency Hedge Fund – Explosive Growth
According to the new index launched by Hedge Fund Research, investors have a huge interest in cryptocurrency . There was “explosive growth” in crypto hedge fund interest by investors over the course of the last year. The number of hedge funds tracking such strategies rose by 3,175% in 2017.
Grimsley detailed the broad variety of investors, such as individuals, family offices, and institutions, who aspire to broaden their income portfolio by investing in cryptocurrencies. Grimsley said:
There is a huge opportunity to bring professional skills to the table. There is a lot of talk from large institutional managers about being innovative but they are not doing so, we are. That is where Michael comes in, in terms of portfolio construction and the way the fund trades, making sure we are compliant, not only capturing the best returns but doing it in a safe way.
Grimsley then added:
We will offer investors exposure to large cap crypto assets. It tends to our background in fixed income where it is about picking market exposure, having diversification and not so much about picking the winners but avoiding the losers.
According to Neidermowwe, investors involved in cryptocurrencies tend to face issues. He is concerned about inexperienced investors, saying:
Many don’t know how it works, how to install them, how to allocate. Whether they just buy bitcoin or a range of cryptocurrencies — compliance issues while storing them securely is a big concern.
The Hype of Cryptocurrency
Grimsley and Wong are not the first asset manger executives to jump ship for the crypto world. Petro Levchenko, who was a director at Credit Suisse and spot trader at FX, joined a crypto start-up. Also, Travis Kling, a former portfolio manager at Poin72 Asset Management, left the firm to get involved in the crypto investment marketplace.
Niedermowwe and his partners believe Prime Factor Capital is an opportunity, but they understand the reluctance of large asset manager firms to get involved in cryptocurrency. Niedermowwe points out:
The market is still at an early stage. It’s rare for a big institutional asset manager to commit to a new asset class. Particularly if they don’t feel the market is there. It’s not surprising that they’re biding their time. We view this as an opportunity.
Do you think more financial executives will leave their firms to start up their own cryptocurrency enterprises? Let us know in the comments below.
Images courtesy of Investment Week and Bitcoinist archives.
Published at Sat, 03 Feb 2018 10:00:25 +0000
bitcoin Investment
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Swiss "Crypto Valley" to Create Digital Identities for Its Citizens on the Ethereum Blockchain
As of September 2017, the Swiss town of Zug will offer all of its citizens a digital identity on the Ethereum blockchain.
Zug, a Swiss town with the population of nearly 30,000 citizens, has been famous for its . Zug has been called the “Crypto Valley” of the financial world since many of its citizens are entrepreneurs who specialize in digital currencies. Numerous bitcoin and blockchain enthusiasts have flocked to the town to take advantage of the entrepreneurial environment and the crypto-awareness of the citizens. Last year, the town even began for government services on a trial basis. In addition, one of the 10 bitcoin ATMs in Switzerland is in Zug, which is operated by the Zug-based bitcoin Suisse.
On July 7, Zug published a press release on its stating its plans to offer digital identities for its citizens. According to the press release, the digital identities will be based on an app that “secures personal information using blockchain technology and associates it with a crypto address.” The system is completely decentralized, thus the citizens will register their identities on the app independently, which will be verified by the town’s own “identity control” procedures.
The Swiss government, in cooperation with external partners, is currently focusing on a centralized solution to create its own digital ID service. However, according to Zug’s press release, the government’s efforts have failed since the application of a centralized digital system is complicated and such systems are “technically considered obsolete today.”
“We want a single electronic identity — a kind of digital passport — for all possible applications. In our city, we do not want this digital ID to be centralized but on the blockchain. We only verify and confirm the identity of a person,” Dolfi Müller, the mayor of Zug, said in a statement.
According to the mayor, blockchain-based identity applications should not be limited to urban services, fee collection or room rentals. In the first phase of the digital ID, a consultative “e-vote” will be held to determine the usage of the innovative system. The voting is expected to take place in the spring of 2018.
The Ethereum-based digital identity application is being developed by the Institute for Financial Services Zug (IFZ) of the Lucerne University, Zug-based ConsenSys and the Zürich-based ti&m.
“Today, our digital identity still lies with major search engines and social networks that profit from it. A self-managed, secure and certified identity is indispensable for the functioning of an increasingly digital society. For the Crypto Valley Zug, we believe in a research collaboration with the financial sector and government agencies,” Mathias Bucher, lecturer at the IFZ, said.
“This pioneering project is technically highly interesting and fits perfectly with the competencies of our company: digitize with the greatest possible security and great user-friendliness,” Mr. Bucher added.
Both ConsenSys and ti&m expressed their excitement about Zug’s digital identity project. Rouven Heck, Product Lead at ConsenSys, was delighted that the small town chose the ConsenSys web-based to handle the project.
“By registering on the public, global Ethereum blockchain, the city of Zug offers its citizens an innovative access for both local and international services,” said Heck.
Thomas Wüst, Founder and CEO of ti&m, emphasized the high security of the new system.
“This solution provides tremendous added value for enhanced security, as private data remains under the full control of individuals while providing a much more streamlined use of digital services,” Wüst said.
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