In 2021, the cryptocurrency market achieved a $3 trillion market capitalization and went mainstream. Crypto’s retail penetration increased, and from banks, institutions, pension funds to insurance companies and other financial industry professionals warmed up to digital assets as a new asset class.
Compared to meager interest rates in the traditional finance world, crypto’s massive gains have attracted the masses, who are increasingly seeing it as a portfolio diversifier. As this risky asset gains adoption, so does the number of investment vehicles offering exposure to crypto.
As traditional financial companies seek crypto exposure, Ariane Capital, which has been in the crypto market since 2014, launched products to provide returns while mitigating high risks.
The firm is an early believer in crypto, since the time when the market was mostly ruled by Bitcoin. It even took the technology-focused family office a few years to open their bank account to create liquidity for their clients.
“In 2014, we had a native crypto prospect that shook our view of traditional finance,” Benjamin Guez, co-founder of the multi-family office Ariane Capital, one of the very few operators in the European financial market, said in a recent interview. “It allowed us to be ahead of and in sync with the whole crypto universe,” he added.
While Ariane Capital is involved in traditional multi-family office activities, it also specializes in cryptocurrencies. The company invests in the crypto industry and supports its development and offers services like legal structuring and opening of depositories.
Ariane Capital’s ARBA FUND is an arbitrage fund, and as the name suggests, it offers arbitrage opportunities in a highly volatile ecosystem run by non-financial professionals. The firm meanwhile has a team of financial market professionals and experienced fund managers approaching the space with proper risk management.
ARBA FUND, the first structured and regulated arbitrage fund on the market, reported a monthly performance of +0.12% in May 2021, while the broad crypto market experienced losses of more than 50%.
Given that just over a decade-old crypto industry is a very fast-paced sector, still highly volatile, and overrun by scams and hacks, it can be hard for big investors to explore the expanding and challenging landscape of crypto without a strong team with years of legitimacy.
“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,” said Guez.
Guez further noted that their clients have been seeking long-term directional exposure and in response to this evolving demand, the company is launching actively managed fund ARBA SPIN.
The Fund applies a risk management methodology with existing market tools such as futures or options. Unlike the arbitrage fund, which had the objective to be decorrelated from the market, ARBA SPIN aims to provide absolute performance.
In its first month after launch, ARBA SPIN yielded +12.5% in a down market.
“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,” Guez said.
