Apollo Capital is seeking to establish $30 million a fund which will specialise in crypto-asset investments, including digital currencies, other blockchain-based assets and ICOs.
The fund is estimated to be fully operational in early 2018 and will be open exclusively to wholesale clients, with a minimum buy-in of $50,000.
The team behind the fund includes Dominet Venture Partners founder Domenic Carosa, CEO Holger Arians and expert associate Tim Johnston, alongside Wall St finance veteran Henrik Andersson and CEO of bitcoin.com.au Rupert Hackett.
Apollo Capital said it will maintain a long-term investment strategy for the majority of the portfolio, which will primarily focus on liquid digital currencies such as Bitcoin and Ethereum. A smaller allocation “will seek to invest in highly selective ICOs and short-term event driven opportunities, in addition to a number of broader market neutral strategies.”
The Apollo Capital announcement included a word of caution, urging investors to allocate only a small portion of their portfolio to a “very high risk asset like crypto.”
Which-50 asked Henrik Andersson, Chief Investment Officer at Apollo Capital, how the fund intends to manage the risk associated with volatile digital currencies.
“In the short to medium-term there is likely going to continue to be very high volatility in these assets. Already, Bitcoin has gone through many up and down cycles in its eight years of existence,” Andersson said.
“While it might be futile to time the short term moves, as a long term investor we believe in crypto over the coming decades. For us, short term volatility can present opportunities.”
The potential for high return is one factor driving interest in the crypto market. Domenic Carosa, Non-Executive Chairman of Apollo Capital said the fund would specifically meet a gap in the Australian capital market.
“It’s clear this is an emerging new asset class which potentially presents lucrative opportunities, particularly because of the idiosyncratic risk they present to conventional portfolios (such as stocks, bonds or commodities) which is driving strong interest amongst the wholesale investor community,” Carosa said.
“To cater to this interest, Apollo Capital is looking to launch a new vehicle to easily tap into these assets without a significant time investment, given the fast moving, highly technical nature of the space.
“The fund will leverage decades of venture, financial and crypto experience to actively manage a diversified portfolio of cryptocurrencies and crypto-assets for investors,” he said.