$10 Million: UBS Alum Banker Pivots, Launches New Cryptocurrency Fund
Originally published on: CCN
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January 24, 2018
Investors have another cryptocurrency fund to choose from. Former UBS banker Jan Brzezek has launched a new cryptocurrency fund and is targeting $10 million by month’s end, as per Bloomberg. The crypto fund is currently domiciled offshore and is passive in nature (though an active product is planned for the summer), tracking the performance of the maiden blue-chip index for cryptocurrencies, said Brzezek. He is seeking approval from Swiss regulators to broaden the reach of the fund to more clients.
Brzezek’s move from traditional banking to cryptocurrencies is indicative of a notable trend of similar moves, one that extends to a former BlackRock pair that decamped from the world’s largest asset management firm to run a crypto hedge fund.
Meanwhile, a trio of former Goldman Sachs employees unveiled an ETF-like cryptocurrency fund targeting wealthy investors on Jan. 1. Crescent Crypto Asset Management’s debut fund gains exposure to nearly two-dozen cryptocurrencies, giving investors greater diversification than Brzezek’s fund. One of the three former Goldman alums, Ali Hassan, entered bitcoin at $300 with the funds from a bonus given to him by his former employer, as per the FT.
For his part, Brzezek has attracted the likes of Raymond J. Baer, honorary chairman of the Julius Baer Gruppe AG, and Susi Partners AG, Zurich’s chief Tobias Reichmuth to the board.
The banker shift to crypto adds insult to injury for a traditional banking sector that has been caught in the middle of the rise of bitcoin and other altcoins despite the best efforts of some to suppress the movement.
Brzezek’s LinkedIn profile says he’s CEO and co-founder of Switzerland-based CryptoFinance AG, with the tagline, “We’re building the first regulated crypto fund, prime broker and storage.” The prime brokerage element suggests there could be leverage and shorting involved in the trades. He launched the new crypto initiative in May 2017, according to the profile, but the fund appears to be getting liftoff now.
The CryptoFinance fund targets institutional investors such as banks, asset management firms and wealth management offices instead of Main Street. It tracks an index that’s calculated by SIX Swiss Exchange AG, a stock exchange, and is thus far comprised of bitcoin, Bitcoin Cash, Ethereum and Litecoin, weighted by market cap. Eventually, the index that the new fund tracks will contain the price of nearly a dozen cryptocurrencies.
The bitcoin price plummeted more than 10% on Jan. 23 alone to near the $10,000 level, and similar price swings would be reflected in the performance of the fund. Check out this one-month chart of the bitcoin market cap below:Brzezek is the first to acknowledge, however, that volatility in cryptocurrencies is “exceptionally high” versus traditional asset classes. Unlike many asset managers, though, he recognizes an opportunity instead of pure risk. In other investment categories, he finds “hardly any room for improvement.”
Featured image from Shutterstock.