Investment trust managers are embracing digital assets and crypto
Shift in market from “consumer apps” to “resilient B2B infrastructure”.
Managers of investment trusts are investing in assets such as crypto exchanges and blockchain investment platforms as they prepare for a digital asset revolution.
After the Financial Conduct Authority (FCA) last week launched a consultation on the tokenisation of fund management and wealth planning, the Association of Investment Companies (AIC) has spoken to investment trust managers about their investments in digital assets and blockchain infrastructure. Their responses are collated below.
Investment trust managers have already begun to invest in the infrastructure that will provide the building blocks for a more digitised financial world.
Nick Britton, Research Director of the Association of Investment Companies (AIC),
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “The future of finance is changing and both regulators and investment groups are responding. This week, BlackRock launched an exchange traded product offering UK investors access to bitcoin, while last week the FCA issued a consultation paper on fund tokenisation. Investment trust managers have already begun to invest in the infrastructure that will provide the building blocks for a more digitised financial world.”
How do you invest in the crypto sector, and why?
Maggie Fanari, CEO of J. Rothschild Capital Management, manager of RIT Capital Partners, said: “Crypto and digital assets are highly specialised and rapidly evolving areas that require deep technical expertise to evaluate the underlying technology, networks and teams driving innovation. RIT primarily accesses the space through specialist managers, who have the technical and operational expertise to identify high quality opportunities.
“We focus on the infrastructure and enterprise layer – companies building the ‘picks and shovels’ that enable broader adoption and use of blockchain technology, such as exchanges, custodians and stablecoin platforms.
“Where we have strong conviction in a company’s potential, we may also invest directly alongside our managers. A good example of this is our investment in Kraken, one of the leading global crypto exchanges.”
Jay Wilson, Partner at Albion Capital, manager of the Albion VCTs, said: “We see a shift in the market from consumer apps and trading platforms to resilient B2B infrastructure that bridges traditional finance and the crypto economy. We focus on backing early-stage infrastructure companies that make digital assets usable and accessible to businesses and traditional financial service providers.
“Our portfolio includes companies like Elliptic, which provides blockchain analytics and compliance tools for financial institutions, Agio, which develops digital asset risk analytics and ratings, and OpenTrade, which builds stablecoin infrastructure and yield products.
“A new generation of high-calibre founders are building platforms that bridge traditional finance and the digital asset economy. Those businesses that provide this essential link are the most compelling investment opportunities: and this is an area where the UK already demonstrates global strength and is well placed to define the future of digital assets.”
Johnnie Martin, Investor at Augmentum Fintech, said: “We invest across fintech and view blockchain infrastructure and digital assets as a key part of the industry. Our approach focuses on companies building the connectivity between traditional financial services and digital assets, where regulated adoption, scalability and compliance are integral.
“The investments we have made to date include companies such as Gemini, a regulated exchange and custodian, and Tesseract, a blockchain infrastructure provider enabling its customers to benefit from institutional-grade yield on their digital asset portfolios.
“These companies represent critical components in creating a trusted and functional digital asset ecosystem. We believe infrastructure providers will see the most durable value creation as institutional adoption increases. This paradigm shift is building momentum, with many global banks now having dedicated digital asset desks, stablecoin volumes now exceeding $100 billion daily, and increasing regulatory clarity in both the US and Europe.
“Our goal is to back the companies building the foundation for mainstream participation in this new asset class – those positioned to benefit from regulation, adoption and integration into global financial markets rather than from short-term price cycles.”
Richard Hickman, Managing Director of HarbourVest Global Private Equity (HVPE), said: “Leading traditional asset management firms are exploring the tokenised fund concept, with some executives repeatedly asserting that real world assets will move onto the blockchain in the years ahead. At the same time, authorities in the US, EU and UK have shown a willingness to embrace digital markets as they seek new avenues for economic growth.
“For the time being, one well-established structure that best aligns with the concept of tokenisation is the listed investment company. Investment companies offer daily pricing and liquidity while providing exposure to a diverse range of investment portfolios. HarbourVest Global Private Equity is one such company, and through its focus on private markets investing has benefited from early-stage exposure to some of the firms that are helping to create the digital markets ecosystem, notably Coinbase. In time, perhaps tokenised funds will become mainstream, to the benefit of HVPE and its portfolio.”
- ENDS -
Follow us on X @AICPRESS
Notes to editors
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 291 members and the industry has total assets of approximately £269 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
- Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
- To stop receiving AIC press releases, please contact the communications team.
