Digital Assets: Crypto Hedge Funds Doubled Assets under Management in 2019 (Report)

https://dailyalts.com/wp-content/uploads/2020/05/business-3159208_640.jpg

PwC and Elwood Asset Management Services used data from the largest global crypto hedge funds to compile the report.

Assets under management (AUM) at crypto hedge funds doubled from $1 billion in 2018 to $2 billion in 2019, while average assets under management expanded from $21.9 million to $44 million, said the report. Median AuM increased from US$4.3 million to US$8.2 million. (CIO)

Returns at crypto hedge funds

The report put the median return from these funds at 30% last year. This compared very favorably with the loss of 46% incurred in 2018. Median returns by strategy type were:

  • discretionary long only – 40%
  • discretionary long-short – 33%
  • quantitative – 30%
  • multi-strategy – 15%

Strategy adoption

The breakup of the fund universe by strategy was:

  • quantitative – 48%
  • discretionary long only – 19%
  • discretionary long/short – 17%
  • multi-strategy – 17%

The study found that about 56% of the crypto funds traded derivatives, while 48% were active short sellers.

Analysis by type of crypto traded

  • bitcoin – 97%
  • Ethereum – 67%
  • XRP – 38%
  • LiteCoin – 38%
  • bitcoin cash – 31%
  • EOS – 25%

Analysis of funds by type of investor

  • family offices – 48%
  • high net worth individuals – 42%

The average investment size was $3.1 million, while the median investment size was $ 300,000.

How funds charged investors

  • median management fees – 2% (unchanged)
  • median performance fees – 20% (unchanged)
  • average management fee – 2.3% (up from 1.7%)
  • average performance fee – 21.1% (down from 23.5%)

The report expressed concerns that fund running costs had “increased materially” in recent years. Heightened regulatory compliance had also pushed up costs.

“Despite the slight increase in management fees, crypto funds will still find it challenging to break even, unless they can attract enough investors, keeping in mind that the median crypto hedge fund in 2019 had US$8.2 million in AuM,” the report observed.

“The reality is that, at such low median AuMs, we expect a large number of existing crypto funds to shut down unless they can generate exceptionally high returns,” the report added.

Related Story:     Digital Assets: Crypto Hedge Funds Shuttered in 2019 At a Stunning Pace                                              

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2021/10/marijuana-g4237088f5_640.jpg
FinTech: AeroPay And Jane Tie-Up To Offer Online Payments For Cannabis
October 15, 2021     FinTech, News

AeroPay and Jane Technologies announced Thursday a partnership to enable online payments via AeroPay across 36 U.S. state markets where cannabis is legal. More than 2,100 dispensaries and 300 companies…

https://dailyalts.com/wp-content/uploads/2021/10/bitcoin-81652-md.jpg
Digital Assets: BoE Official Likens Crypto To Subprime, Warns Of 2008-Like Crash
October 15, 2021     Digital Assets, News, Regulations

In a speech on Wednesday, Jon Cunliffe of the Bank of England called for tough regulations on cryptocurrencies, drawing a parallel between the $1.2 trillion subprime mortgage market in 2008…

https://dailyalts.com/wp-content/uploads/2021/10/nexon-10000-vehicle-big.jpg
Venture Capital: TPG Rise Climate And ADQ To Invest $1B In Indian Group Tatas’ EV Unit
October 15, 2021     ESG and Sustainability, News, Venture Capital

Tata Motors (NSE: TATAMOTORS), the automobile company of the Tatas, the Indian salt-to-airlines business conglomerate, will receive an investment of approximately $1 billion from TPG’s Rise Climate Fund and Abu…

https://dailyalts.com/wp-content/uploads/2021/10/BTC-Price-Chart-0427pm.jpg
Alternative Investments/Digital: Bitcoin Spikes In Anticipation Of SEC’s Clearance Of Bitcoin ETF
October 15, 2021     Alternative Investments, Digital Assets, News

Bitcoin, the leading cryptocurrency, is within handshaking distance of its April all-time high of $64,895 after spiking over the last 24 hours on rising market expectations of an imminent SEC…