22 janvier 2018

Former UBS Banker Launches Crypto Fund, Seeks Swiss Approval

Patrick Mehrhoff

Patrick Mehrhoff

Marketing et communication chez Crypto Finance AG

A propos de l'auteur

Swiss fintech startup Crypto Finance AG has launched a fund for crypto currencies and wants to raise around 10 million dollars by the end of January, CEO and co-founder Jan Brzezek told Bloomberg News in an interview.

« It’s a passive fund that tracks the first blue chip index for crypto currencies, » according to Brzezek, who previously worked at UBS Group AG. This index is calculated by stock exchange operator SIX Swiss Exchange AG. It is weighted by market capitalization and so far includes Bitcoin, Bitcoin Cash, Ethereum and Litecoin. In the future, the index is to be extended to a total of 10 currencies.

« The fund is aimed at institutional investors, not at retail customers, » Brzezek said. He named banks, asset managers and family offices as examples. The fund was launched offshore, but the company is working on a license for a Swiss product. Brzezek hopes that Swiss regulation leads to an increase in potential clientele.

Last month, Investment strategists at Deutsche Bank Wealth Management warned in a note that crypto currencies are a risky asset as recent price increases are due to speculation and an imbalance between supply and demand. They described volatility, possible price manipulation as well as data loss and data theft as being problematic.

Brzezek admits that the volatility of crypto currencies over other asset classes is « exceptionally high ». But he sees this as an opportunity. Asset managers are currently looking for returns and for many « other asset classes, there is hardly any room for improvement », he said.

That the first fund of the company is passively managed is due to the fact that the asset class of crypto currencies is still relatively young, acoording to Brzezek. A fund that tracks an index is more transparent and understandable for investors in a new market, he said. However, actively managed funds are planned for the summer.

Crypto Finance, which was founded in June and employs 26 people, had raised around 17.5 million Swiss francs at the end of last year to expand the company which also offers brokerage and storage services for Bitcoin and other crypto currencies. It is headquartered in Zug. The Swiss canton has become a global center for crypto-infrastructure.
« Zug offers a unique balance that combines a political culture that is forward thinking and embracing of blockchain technologies while also incorporating more traditional Swiss values, such as privacy protection and confidentiality, » according to Oliver Bussmann, president of the Crypto Valley Association, which promotes the location. At its founding, it had 16 members, today there are over 550 companies and individuals involved.

Brzezek was able to win well-known names from the Swiss financial community for the board of his company. Raymond J. Baer, Honorary Chairman of Julius Baer Gruppe AG, and Tobias Reichmuth, CEO and founder of asset manager Susi Partners AG, Zurich, are part of the board, among others.

Brzezek first dealt in more detail with crypto currencies and the underlying blockchain technology while being at UBS between 2015 and the beginning of 2017. « I felt like Alice in Wonderland, » he recalled. He believes the new technology is changing the financial world.

He is less certain about how much a Bitcoin will be worth in one year from now: « Maybe it’s $50,000 or just $1000. It could be that another crypto-currency is taking the lead. »

Lire la suite