A former senior executive at consultancy firm Bain & Company has announced the launch of a new fund, positioned to give access to cryptocurrencies to the Latin American market.
The newly-formed Crypto Assets Fund, launched by Roberto Ponce Romay, is in the process of raising $50 million, in an investment approach designed to give wealthy families and individuals access to an alternative crypto investment vehicle.
The fund is set to invest primarily in bitcoin and ether, as well as ripple, litecoin, dash and zcash. The first tranche of capital, thought to be around $10 million, is currently in closing, with an announcement expected later this month confirming the success of the fundraising effort.
According to Romay, the fund is designed to appeal to Latin American investors, often living in unstable economies and jurisdictions, to realise investment returns from cryptocurrencies.
As a mechanism for hedging other investments, and learning about the value storing potential of crypto, the fund is expected to have considerable appeal for some of the region’s wealthiest private clients.
The fund is being established in the British Virgin Islands, and will charge no fees, other than a 30% share of interest carryover when investment conditions are met. According to published fund documentation, investments will initially be split 50/50 between bitcoin and the rest, respectively.
David Garcia, the fund’s co-founder, said that while its core appeal was to wealthy families in Latin America looking to diversify away from holding local currency savings, the structure of the fund would inevitably hold a broader appeal.
“We are mainly targeting family offices in Latin America. But there are other players interested in the fund, because the fund strategy also fits with what they’re looking for…[for these people,] storing their savings in the local currency is not a smart option.”
The fund’s expected targeted return over three years has been set at 71% per year, based on historic growth forecasts in the underlying cryptocurrency markets in which they choose to invest. The minimum expectation is set at 26% per year.
The fund is far from the first of its kind, with several funds already operational or proposed. Some have even tried, thus far unsuccessfully, to list on US stock exchanges, although the SEC has thus far been unwilling to accept these listings.
Crypto Assets Fund expects to complete its first funding round over the course of this month