With the vigorous development of cryptocurrency and related technologies continuing to attract large asset management companies, people familiar with the matter said that London-based hedge fund company Marshall Wace is planning to enter the field of digital assets.
According to a person familiar with the matter, the $55 billion asset management company will invest in blockchain technology, digital currency payment systems and stablecoins. The person said that Marshall Wace is launching a portfolio aimed at acquiring shares in private digital financial companies in the late stages of development.
Marshall Wace’s move into the encryption field coincides with the rapid expansion of the industry. More and more traditional financial companies, including fund managers, banks and consulting companies, are beginning to build digital asset businesses.
People familiar with the matter said that the company has recently been seeking to hire employees in the field of digital assets. Although this new business is still in its early stages, the group plans to expand rapidly. This action may include other forms of investment, such as potential digital currency transactions. Marshall Wace declined to comment.
This expansion of Marshall Wace (which has not been reported before) marks the latest large hedge fund to discover a profitable opportunity in the fast-growing digital asset industry.
Just last year, another large hedge fund also revealed its admission plan. According to the regulatory documents submitted in March 2020, Renaissance Technologies, one of the world’s largest hedge funds with an asset management scale of 75 billion U.S. dollars, has been paying attention to the Bitcoin futures market. The fund stated on its Form ADV on March 30 that its Medallion fund has now been approved for bitcoin futures trading and will be able to buy bitcoin futures on CME.
In April of this year, Bloomberg reported that Brevan Howard Asset Management is also preparing to start investing in digital assets, becoming the latest fund management company seeking to capitalize on the cryptocurrency boom. According to people familiar with the matter, the company will first invest up to 1.5% of its US$5.6 billion major hedge fund’s assets in digital assets. The initial distribution will be overseen by Johnny Steindorff and Tucker Waterman, co-founders of the crypto investment company Distributed Global. A spokesperson for the company declined to comment. Its co-founder and billionaire Alan Howard (Alan Howard) is a big supporter of the field, and he has recently invested in digital asset custody and trading technology company Copper.co and crypto trading application Kikitrade.
After many peers have taken actions one after another, Marshall Wace is naturally unwilling to fall behind. It is understood that Marshall Wace, founded by Sir Paul Marshall and Ian Wace in 1997, launched a fund earlier this year to invest in healthcare companies before they go public and continue to hold them after they go public. This move is part of the company’s plan to explore new sources of return in the private equity market.
A person familiar with the matter said that the new digital financial investment portfolio will adopt a similar approach to late-stage venture capital investment in companies participating in the construction of digital financial infrastructure. The infrastructure surrounding stablecoins, which act as a key gateway between traditional financial markets and cryptocurrencies, is an area of particular concern for the company.
The launch of the portfolio will be led by Amit Rajpal, CEO of Marshall Wace Asia and co-founder of Niyogin, an Indian fintech company that provides loans to small businesses. Marshall Wace is still negotiating with potential investors in the new portfolio, and the size of the portfolio is still unclear.
It is worth mentioning that Marshall Wace’s Tops Market Neutral Fund has risen about 11% as of the end of May (Note: The fund analyzed the buying and selling recommendations of about 1,000 external analysts).
Marshall Wace also has other layouts in the blockchain field. At the end of May this year, the American financial technology company Circle completed a $440 million financing, and Marshall Wace was one of many investors.
A recent survey found that hedge funds expect that in five years their exposure to cryptocurrencies will increase substantially, accounting for an average of 7.2% of their assets.
However, some hedge funds remain skeptical. Paul Singer’s Elliott Management wrote to investors earlier this year that cryptocurrencies could become “the biggest financial scam in history.”
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