Epoch Partners Limited, a hedge fund based in the Cayman Islands has successfully launched the world’s first retail initial public offering (IPO) of a cryptocurrency and digital assets related hedge fund.
Sign of Changing Times
Making the announcement in Tokyo, the company said:
The Securities Registration Statement for the fund was filed on EDINET — the disclosure system of the Japanese Financial Services Agency — on September 28, 2018, with subscriptions being opened on October 15th. According to the Securities Registration Statement, subscriptions are to be capped at 100 Billion Yen, or about US$900 million.
Traditionally, hedge funds have been viewed as a poor fit for cryptocurrency markets due to their extremely volatile nature, but 2018 has seen a trend toward entry of institutional investors and hedge funds from the mainstream finance world. The annoucnement by Epoch Partners is likely to generate a significant amount of attention in crypto investment circles and it further underlines how far the market has come.
Epoch Digital Assets will make use of hedge fund management know-how to invest into funds and other investment vehicles with exposure to a variety of cryptocurrency, initial coin offering (ICO), and other digital assets, while seeking aggressive returns and reduced volatility.
“Still a Very Volatile Market”
While mentioning the investment upside of crypto investment, the company also however advised that investors going into crypto do so at their own risk.
In its words:
The ability to get a diversified exposure to the cryptocurrency and digital asset space with a relatively small investment should be one element of appeal to retail investors. While the digital asset space has significant upside growth potential, it still represents a very volatile market with large price swings.
James Skinner, partner at Epoch Partners Ltd has this to say on the milestone:
Japan has been a leader in the cryptocurrency and digital asset space. They were the first market to create a proper regulatory framework for cryptocurrencies, and as such can be seen as the world pioneer in this area. We were very keen to undertake the world's first public offering of a cryptocurrency fund in Japan and look forward to great things ahead. The asset class is still young, but the movement to more institutional players like Goldman Sachs and Nomura entering the space shows the great potential of this area. In the future, digital assets are likely to become an integrated part of investment portfolios, similar to equities and fixed income products today, albeit on a smaller scale.
Epoch Partners will work alongside Tokyo headquartered Taneo Partners whose role is to market the fund and sell accordingly while collaborating with other Japanese security companies.