A Singapore-based fund management platform, Swiss-Asia Financial Services, has launched an absolute return cryptocurrency hedge fund called Kryptos Alpha.
The new fund will be managed by Zhuang Sheng Quan, co-founder and CEO of Kryptos Associates, a company that provides technology solutions for cryptocurrency trading.
All the fund’s assets under management come from high-net-worth individuals, Zhuang told Citywire Asia. He is charging 2% in management fees and 20% for performance - the traditional fee structure - for the standard class.
‘We are in initial stages of discussion with family offices for now. But we anticipate this to grow as the track record is built over time,’ he said.
The fund’s strategy incorporates arbitrage trading of different cryptocurrencies among various exchanges, exploiting price fluctuations, as well as long-short basket trading of cryptocurrencies based on quantitative factor models.
The hedge fund will selectively participate in initial coin offerings (ICOs) and pre-ICOs of new blockchain companies.
According to research firm Autonomous Next, there were 251 crypto funds globally at the end of the first quarter of 2018.
‘Singapore’s regulatory environment has embraced cryptocurrencies, so we see a lot of opportunities to grow in this space,’ said Steve Knabl, COO and managing partner of Swiss-Asia Financial Services.
‘With growing investor demand as well, we expect to see the number of crypto funds rise in Singapore, transforming it into a crypto hub in the Asia-Pacific region.’
Swiss-Asia provides back and middle office support, including operational checks and due diligence, to start-up hedge fund managers.