Portal Asset Management recently launched its first fund, the Cayman Islands-domiciled Portal Digital Fund, which operates via a fund of funds structure and is targeting sophisticated investors in Asia-Pacific, according to a statement from the firm.
The fund was incepted in June. Initial fundraising will focus on high net worth individuals, family offices and boutique institutional investors and will close by 31 March 2020, according to the statement.
“Investors are waking up to the fact that Asia Pacific is now leading the growth of digital assets. Illustrating this, Singapore has become a key hub for innovation in this area and the SGX is pushing ahead with integrating ledger technology into its systems and processes,” Mark Witten, chief investment officer and portfolio manager, said in the statement.
However, crypto-currencies are a considered a very high risk investment and in Hong Kong, the regulator has proposed banning retail investors from investing in them. According to the Securities and Futures Commission, “investing in virtual assets may expose [investors] to significant risks, in particular, insufficient liquidity, high price volatility and potential market manipulation”.
The fund of funds portfolio is focused on two investment streams: quantitative-driven trading covering systematic, momentum and arbitrage strategies and long-only VC/PE funds investing in blockchain protocol infrastructure. The initial focus of the fund will be biased to the former.
“Portal invests in fund managers that may invest in blockchain cryptocurrencies, digital currencies and digital currency networks, altcoins, protocol tokens, blockchain based assets and businesses, ICOs (initial coin offering) and pre ICOs. These may include both long/short investments and related derivative instruments traded on global exchanges,” according to a spokesman for the firm.
Fund of funds in general have been criticised for high fees because they invest in in several underlying funds, each of which carries its own management fees.
According to the firm, the digital fund of funds uses a 2-and-20 fee structure — a 2% annual management fee based on the NAV of the fund plus a 20% performance fee and “administrative costs”.
The statement also noted that the fund of funds is aiming to invest in the funds of 4-8 specialist global fund managers. However, the spokesman declined to name the managers .
Portal is targeting funds under management in excess of $100m over the long term, according to the firm.
