After a decade spent labeled as “worthless pseudo-assets intended to, at best, amuse unconscious geeks,” cryptocurrencies have forcefully achieved their massive adoption phase in 2021. As a result, banks, institutions, and other finance industry professionals, including the most reluctant ( those who had never adequately studied the subject), have finally, for once, taken the time to become aware of the extraordinary potential of this new asset class.
Since then, as in early 2018, crypto investment funds and vehicles have popped up everywhere. Arbitrage opportunities, directional or long-short trading, multi-strategy, presales… There is something for everyone.
How do you find your way through this plethora of offers? Who should you trust with your money if you want to position yourself in the crypto assets space but don’t want to get actively involved? Which countries are the most advanced in terms of crypto investment vehicles? What are the traps?
We plan to address these issues through a series of upcoming articles. As an introduction, we interviewed Benjamin Guez, co-founder of the multi-family office ARIANE CAPITAL, one of the very few operators in the European financial market whose expertise in cryptocurrencies dates back to 2014.
How did Ariane Capital get into crypto assets?
We were lucky enough to believe in it at an early stage. In 2014, we had a native crypto prospect that shook our view of traditional finance. While we are historically a technology-focused family office, the world of cryptocurrencies was still opaque and new compared to conventional finance. It took us a few years to open our bank account and create liquidity for our clients, but it allowed us to be ahead of and in sync with the whole crypto universe. Today, ARIANE CAPITAL is synonymous with a specialized company in cryptocurrencies, an area complemented by its traditional multi-family office activities.
Over time, we have been joined by a team of professionals. As a result, we now have the internal capability to analyze the crypto universe, structure it, invest in it, and support its development. Our services range from legal structuring to the opening of depositories.
What is your offer in terms of investment vehicles?
We were able to identify arbitrage opportunities early on in a highly volatile ecosystem run by non-financial professionals. With the ARBA FUND arbitrage fund (Bloomberg isin code), we were among the first structured and regulated arbitrage funds on the market. Our team includes financial market professionals and experienced fund managers specializing in a proper risk management approach.
Right now, many of our peers are jumping into the cryptocurrency world, which I think is beneficial for the industry as a whole. However, it’s worth noting that it’s a challenging world and landscape to explore: if you don’t have a strong team with years of legitimacy, it’s easy to make discerning mistakes.
We can draw a parallel line between the world of finance and this universe of cryptocurrencies, but the codes and the mentality remain very particular.
What’s your current strategy and investment philosophy?
Today, demand has evolved, and our clients seek out long-term directional exposure with the ability to identify future champions. This is why we have decided to launch ARBA SPIN, a certificate actively managed by our management team, with a long-term directional objective mixing fundamental analysis of the crypto universe and the ability to seize opportunities identified within.
Thus, we apply a risk management methodology with existing market tools such as options or futures. Still, where the arbitrage fund had the objective to be decorrelated from the market (in May 2021, ARBA FUND noted a monthly performance of +0.12% in a market that loses more than 50%), ARBA SPIN has the objective of absolute performance. Although we are a relatively conservative family office, our clients’ growing demand and network have led us to create ARBA SPIN, a new generation of certificates that actively manage cryptocurrencies with strong alpha generator qualities by the ARIANE CAPITAL teams.
The market is now aware of the underlying assets’ volatility and wishes to have a dedicated risk allocation given the strong potential of the crypto asset class in this universe.
How did ARIANE Conclude 2021? How well did you perform?
In 2020, the performance of ARBA FUND (KYG2578H1039 / CSFCMHF KY) (Bloomberg) was +41.75%. For 2021, we expect to finish the year closer to +15%. This is mainly due to the shrinking of arbitrage gaps and opportunities.
The first month after launch, the ARBA SPIN certificate (CH1100420475) yielded +12.5% in a bear market. This performance is linked to the alpha generator qualities of the management team, who were able to identify several significant opportunities.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.