Paris-based fund management company TOBAM has announced the launch of the TOBAM Bitcoin Fund, an unregulated Alternative Investment Fund, set up in France. Previously, it has secured an approval from the Autorité des Marchés Financiers, one of the country’s top financial regulators.
Touted as the first of its kind in Europe, the fund will allow qualified and institutional investors wanting to gain an exposure to the cryptocurrency to benefit from TOBAM’s “research and IT systems” to track the value of investing in Bitcoin. Said research relies on the team of computer specialists, engineers, researchers and risk management experts.
These factors combined, according to TOBAM, allow for the first time qualified investors to gain exposure to the cryptocurrency in a more convenient and safer vehicle. Through a “transparent and rigorous investment process,” the TOBAM Bitcoin fund integrates the management of potential forks as well as the mitigation of the risk of loss and theft.
“Research is the founding pillar of TOBAM, and we have conducted research from a technical, financial, economic, and regulatory point of view on Bitcoin for a year prior to launching this fund,” Yves Choueifaty, President of TOBAM, said in a statement. “This first move in the world of cryptocurrencies showcases our dedication to remaining ahead of the curve and to provide our clients with innovative products in the context of efficient (i.e. unpredictable) markets.”
Christophe Roehri, Head of Business Development at TOBAM, had this to add: “Direct investment in Bitcoin can be operationally challenging, from dealing with the choice of the platform, to maintaining the proper security measures in terms of custody and to managing the changes made to the protocol – hard forks. Our goal is to take control of these operational challenges in order to facilitate access for qualified investors willing to gain exposure to Bitcoin. All of that under the format of a fund.”
According to the Financial Times, the fund will rely on PwC to perform auditing services while Caceis, the asset servicing banking group of Crédit Agricole, will hold custody of the bitcoins tied to the fund.
We are not super convinced about the “handling of the risk” as many of these assets are highly volatile, but then again — that could also mean a good thing, as very few other assets could deliver gains as big as those of cryptocurrencies.
For what it matters, TOBAM has developed cyber-security systems and “cutting-edge technological capabilities” over the past 12 years, both of which will back up the structure and functioning of the fund. These factors along with research capabilities and in-house computer power should deliver risk control and straight-through-processing investment systems.
The fund is available to eligible investors worldwide on a private placement basis. If everything goes as planned, the fund will grow to as much as $400 million over the next several years. That’s a bold goal, and it will be interesting to see how that goes. We’ll be watching, have no doubts about it.