May 18, 2024

Spanish A&G Banco bank offshoot launches an actively managed cryptocurrency fund

Spanish A&G Banco bank offshoot launches an actively managed cryptocurrency fund

A&G Funds, an offshoot of the Spanish private bank A&G Banco, has unveiled an actively managed cryptocurrency fund. This fund will focus its investments on other financial instruments such as exchange-traded notes or products, rather than directly investing in cryptocurrencies.

Diego Fernández Elices, the Director General of Investments at A&G, believes this fund provides an ideal solution for any professional European investor keen on exploring the world of cryptocurrencies. However, he emphasises that this is a very high-risk fund. The launch announcement and the offer document are replete with caveats.

The Spanish regulator, CNMV, has also issued a stern warning about the very high risks associated with cryptocurrencies. These risks stem from their extreme volatility, complexity, lack of transparency, custody risk and concentration, all of which could potentially lead to a total loss of the investment.

Credit Agricole’s CACEIS will act as the depositary for the fund, with PwC serving as the auditor. The fund’s disclosure document advises that it is not suitable for anyone looking to invest for a period of less than four years.

The fund can allocate 35% or more of its assets to Bitcoin and Ethereum, but at least half of the assets will have a specific exposure to crypto. The fund will also invest in other cryptocurrencies that have significant volumes and liquidity. Additionally, it can allocate up to 50% of the fund to listed equities or public fixed income securities linked to digital assets.

In related news across Europe, Deutsche Bank’s DWS is joining forces with Galaxy Digital to issue European exchange-traded products (ETP) for digital assets. In the UK, Brevan Howard has a digital assets division, Brevan Howard Digital, which acquired a crypto hedge fund earlier this year. Over in the United States, there is mounting anticipation about whether the SEC will give the green light to a BlackRock spot Bitcoin ETF.