According to the Financial Times, hedge fund manager Alan Howard who has an impressive fortune of $1.35 bln is set to launch a new cryptocurrency venture that is expected to manage up to $1 bln in digital assets. The purpose of the fund is to tackle the problems related to the governance of the new asset class.
A billion-dollar crypto bet
Last year, Bloomberg reported that Howard made a “sizeable personal investment” in crypto in 2017, and he planned to pour more of his money into different coins. The allure of the volatile asset hasn’t fizzled out since then.
Howard’s personal crypto riches are controlled by Elwood Asset Management, which is spearheaded by Bin Ren. With the help of a new platform, they will create portfolios of crypto funds for big institutional investors, which will be based on a level of risk tolerance, expected returns and liquidity terms.
I see this as a very big growth opportunity,” said Ren.
Are crypto hedge funds safe?
As reported by U.Today, many cryptocurrency hedge funds had to close their doors in 2018 since they were not able to survive the bear market. Those ventures that rode the crypto craze in 2017 experienced an average 50 percent drop the following year.
Those hedge funds that survived the crypto winter still face problems with regulations and custody, which makes them a risky investment vehicle.
Ren claims that Elwood has already come up with a list of 50 crypto-oriented hedge funds that will be suitable for their clients.