The Malta-based Exante Ltd. has launched the groundbreaking Bitcoin Hedge Fund, the first of its kind in the world, which allows institutional investors and high-net worth individuals to include the emerging cryptocurrency into their investment portfolios.
Demand for a Bitcoin Hedge Fund
Forbes.com contributor and Bitcoin Foundation director Jon Matonis, explains that the new hedge fund expands the investing horizon of cash-flush organizations and persons to bitcoins by offering it as part of a regulated investment vehicle-a service that has been increasingly requested by the market. This demand has been fueled by the rising prominence, use and integration of bitcoins in the global economy.
"Although any person or entity can acquire and store bitcoins on their own, institutional investors are typically restricted in the types of assets available within their investment charter," said Matonis.
"Similar to a mutual fund or hedge fund for alternative assets, Exante's Bitcoin Fund permits institutions and high-net worth individuals to access the vibrant bitcoin market with a licensed product and this alone is an innovative development."
No access yet for United States clients
U.S.-based clients though will not be able to access the fund for now, Exante Managing Partner Anatoliy Knyazev told Forbes. "Typically, a feeder fund is established in the U.S. (commonly Delaware) to facilitate the investments. We are in the process of estimating our costs on creating one," said Knyazev.
Initial minimum subscription
But for the rest of the world, the Bitcoin Hedge Fund is already taking in investments. The initial minimum subscription has been set at $100,000 with a 0.5% upfront subscription fee. The minimum additional subscription amount is $10,000. All interested customers though will have to go through the Exante standard vetting process for capitalization requirements.
Management fee and security
Exante also charges a management fee payable monthly in arrears, in an amount equal to 1/12 of 0.5% of Net Share Value. Forbes' Matonis noted that this management fee goes to providing "sophisticated security and wallet management that one would expect with such large amounts at stake."
Through the use of advanced encryption technology as well as topnotch bank security, investors should feel at ease that their bitcoin investment data are protected from such risks as data loss, hardware failure, and employee theft, among others.
Two-way secondary market
Forbes' Matonis said there are plans to provide a two-way secondary market for the trading of bitcoin fund shares. Doing so will increase trading speed and convenience since customers will be able to bypass the usual subscription and redemption process.
Exante consists of around 60 staff operating from Malta, Singapore and Russia. Interested Bitcoin Fund customers can visit https://exante.eu to find more about the company and its investment services credentials.