Global Advisors (Jersey) supported by JTC, and in partnership with law firm Carey Olsen, has launched what is believed to be the world's first regulated, crypto-denominated fund.
CoinShares Fund I, which launched on 23 June 2017, is a self-managed fund and will receive investment exclusively in Ether, the ‘crypto-fuel’ which runs the Ethereum platform.
Global Advisors says it is the first regulated bitcoin investment strategy and the firm is the provider of Europe’s only exchange traded bitcoin notes (ETNs).
The firm writes that since May 1st more than USD1 billion was raised through Initial Coin Offerings (ICO).
“This statistic serves both as striking evidence of the emerging, investable opportunity and as a signal for caution in a rapidly developing space, a sentiment echoed in the high volume of inquiry received by the Global Advisors (Jersey) Limited team in Q2. Put simply, investors want to participate in this movement, but through a diligent fiduciary capable of making educated investment decisions,” the firm writes.
“We believe strongly in the emerging use case of cryptocurrencies as tools for capital formation, but as with all innovation, discretion and caution is key. This fund is structured to offer managed exposure to the emerging space, allowing the fund investors to participate cautiously and intelligently, as this new market unfolds,” says Daniel Masters, Chairman at Global Advisors.
The fund while structured to invest broadly, will focus first on ICOs where tokens are integral to powering the protocol and secondly as a vehicle to invest in other viable, alternative cryptocurrencies which are emerging, in addition to bitcoin.
As with Global Advisors’ current fund GABI Plc (formerly Global Advisors bitcoin Investment Strategy Plc), the newly closed fund is Jersey based, a fact, the firm says which can be attributed to the diligence of the Jersey regulators who continue to lead with their innovative approach to regulation in the cryptocurrency and digital asset space.
“We are consistently impressed with the level of sophistication and attention with which Jersey regulators approach the digital asset space. When we launched GABI, they took a collaborative and pragmatic approach which helped us develop a world-class investment vehicle, that is still running smoothly three years later. This time around, the team and approach was even more impressive,” says Daniel Masters Chairman of Global Advisors (Jersey) Limited.
The fund will then trade cryptocurrencies and other tokens (or ‘coins’), including participating in selected Initial Coin Offerings (ICOs). ICOs are the crypto-alternative to the Linux or Mozilla Foundations, and represent a form of capital raising increasingly utilised by entrepreneurs in the crypto arena, regularly inviting comparison with traditional venture capital or crowdfunding.
The fund will be regulated under Jersey's recently introduced Private Fund Regime. This regime is designed specifically for funds operating with a small number of very sophisticated investors, with the proportionate regulatory environment offering an impressive speed to market.
Legal advice in establishing the fund was provided by Carey Olsen in Jersey with support from Chadbourne & Parke LLP in New York, while JTC will provide a range of ongoing services including: directors, company secretary, fund administration, fund accounting and investor reporting.
William Byrne (pictured), Group General Counsel at JTC, says: "We are delighted to have been selected by Global Advisors as partners to support this unique new fund, which is a genuine first. Crypto-denominated funds are an exciting new alternative asset class and, as an innovative independent firm, we have worked hard to establish our market-leading credentials in this area. We are particularly pleased to be providing our new crypto portfolio valuation system, which operates via multiple exchanges, taking live pricing and providing the ability to trade on a T0 basis."
James Mulholland led the Carey Olsen team, assisted by Counsel Chris Griffin. Griffin says: “It was great to work with Global Advisors on this fund launch against a tight timetable – the fund shows both Carey Olsen’s growing Fintech strength and Jersey regulator’s practical approach to investment funds launching in this pioneering asset class worth USD21 billion.”
Jean-Marie Mognetti, Co-Principal of Global Advisors Holdings Limited and Director of the GP, adds: "The amount of diligence required to structure this ICO and ‘Alt Coin’ fund, a Private fund capable of investing in this emerging digital asset class, was both complex and ground-breaking. Much credit is due to our legal and fund administration partners who worked diligently to provide the most robust, compliant structure possible based on the current regulatory environment."
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