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Launch of the Aaro Distributed Ledger Technology Multifund

Friday, May 15, 2020
Opalesque Industry Update - As economic prospects cloud and volatility returns to all asset classes, investors are looking for alternatives to traditional alternative investments. Meeting this need, the Aaro DLT Multifund launched on May 1, 2020. An industry first, this institutional quality fund of funds aims to capture the growing investment opportunities in DLT / Blockchain-related Technologies and Cryptoassets.

The goal is to offer broad exposure to the long term growth of DLT and Cryptoassets, whilst protecting against the markets' short term volatility. This will be achieved by investing across a range of funds with different investment strategies; an approach that provides a strong source of diversification in these fast-moving markets.

Aaro Capital's Chief Executive, Peter Habermacher, points out, "We invested our own money successfully in Crypto and also recognised the emerging opportunities associated with Blockchain-related technologies. Our experience showed that the best way to invest in these opportunities is through a professionally run fund of funds approach. None seemed available, so we built our own process based on industry best practise, with proprietary adaptations designed specifically for the DLT / Blockchain and Cryptoasset space."

There are exciting opportunities in both areas:

DLT / Blockchain: From Finance to Healthcare to Logistics, both incumbents and disruptors are investing heavily in many emerging applications. McKinsey has identified more than 80 powerful use cases across a dozen major industries.

According to Gartner Research, the Blockchain industry will deliver more than $3 trillion in value by 2030. This is a powerful growth story and a great long term strategic opportunity.

The Aaro DLT Multifund will exploit these exciting developments by using economic analysis to identify the industries and companies whose deployment of DLT / Blockchain will create real value. Aaro will identify the funds, often with a fundamental focus, that are best placed to capture the investment opportunities that will arise.

"Investment into DLT / Blockchain technologies and applications is growing rapidly," says Johannes Gugl, one of Aaro Capital's Partners. "Financial institutions and corporations in many different industries, plus governments, are investing in this novel technology at an increasingly fast pace. In 2019, $13 billion was invested in Blockchain projects3 and this is just the beginning."

Cryptoassets: There is great short term return potential, provided that the volatility and manager due diligence are approached properly. Cryptoassets are also largely uncorrelated with other asset classes, which makes them powerful as a tool for diversification. Fidelity found that half of institutional investors now view Cryptoassets as having a place in their portfolios.

The market is evolving fast, with a growing number of institutional players, such as Brevan Howard and Renaissance Technologies entering the space. More than 500 funds are already active, with over 160 with AuM over $50m.

The Aaro DLT Multifund aims to capture the opportunities through funds following investment strategies including fundamental long-short, market neutral, quantitative arbitrage and trend following strategies, each aiming to exploit short to medium term market inefficiencies, as well as the long term growth story.

Aaro Capital's Chief Investment Officer, Ankush Jain observes, "This is a remarkable opportunity for investors to participate in this exciting growth story. This is still a young industry whose development is comparable to the early years of the Internet and there will be some big winners. Our aim is to identify and invest in these opportunities in a considered, prudent and risk-controlled manner."

Aaro Capital's London-based team combines younger investors, such as CEO, Peter Habermacher and CIO, Ankush Jain with their direct experience of Crypto investments, with senior practitioners from the hedge fund industry such as Peter Rigg, former CEO of HSBC Alternative Investments. The firm also employs DLT / Blockchain experts as well as academic advisors from top UK universities.

The Aaro DLT Multifund's approach is based on a unique process which was developed with a major institutional consultant. The process is based on well established methods, with customised adaptations for the analysis of DLT / Blockchain and Cryptoasset funds. Given the evolving nature of the industry and its structures, there is a notable emphasis on operational as well as investment due diligence.

What do you think?

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