APEX Token Fund (APEX), a San Francisco-based investment manager, has launched a tokenised cryptocurrency-focused fund of hedge funds, allowing investors access to a diversified portfolio of assets managed by a selection of top performing cryptocurrency hedge funds.
Investors can buy into the fund by purchasing APEX tokens (tokens), which are registered on the Ethereum blockchain. The fund targets primarily retail investors and those already familiar with investing in cryptocurrencies, who want more diversified exposure to this emerging asset class.
The introduction of a tokenised fund brings investment in this emerging asset class into the mainstream. Unlike investing directly in crypto-focused hedge funds, purchasing APEX tokens does not require a high minimum investment nor committing to multi-year lock-in periods. The fund of fund structure means investors benefit from the due diligence, experience and oversight of expert fund managers without having to manage a portfolio of assets themselves.
Cryptocurrencies tend to have a low correlation with more traditional asset classes, but many are highly correlated with each other. By investing in a basket of five to fifteen hedge funds, each employing uncorrelated investment strategies, the Apex Token Fund mitigates the volatility risk which comes from investing in a single asset class, while maximising returns in the rapidly growing blockchain markets.
APEX tokens are tradable from the moment they are distributed to individual investors. They can be bought and sold on any exchange which chooses to list them. Tokens can also be exchanged directly through peer to peer transactions. Every time an APEX token is bought or sold, the transaction is recorded on the Ethereum blockchain.
Participation in the fund will begin with a sale of APEX tokens in March 2018. Tokens can be bought through Apex Token Fund’s website. The minimum investment in the fund is 0.1 ETH, the cryptocurrency currently worth around USD862. The initial cost of an APEX token will be USD1.00. The offering will be accompanied by the highest level of disclosures and accompanying memoranda in accordance with all token offering jurisdictions. The APEX token is only available to non-US investors.
Unlike traditional investment houses, Apex Token Fund will not collect fees from investors after the tokens are distributed. The fund will only charge an initial upfront fee to cover administrative and management costs throughout the lifecycle of the fund.
Christopher Keshian (pictured), managing partner of Apex Token Fund, says: “The impressive gains we have seen in crypto-assets are generating significant investment returns. However, the rapid evolution of the blockchain market has made it harder for individual crypto investors to realise consistent, substantial gains as they have to compete with advanced algorithms and data rooms afforded by new hedge funds. To truly bring crypto-assets into the mainstream, we must develop more mature financial products suitable for a larger body of investors. The APEX Token Fund uses technology which will unlock liquidity, manage volatility and lower barriers to entry for a larger market of global investors.
“We believe that the best way to build a portfolio in the crypto-asset space is by diversifying investment strategies and fund managers. Furthermore, we believe we have the technology, data, and experience to balance these strategies in a portfolio that maximises exposure to the most promising strategies while hedging risk over many market conditions.”
