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Efficiency and economies of scale in new fund platform

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Bermuda-headquartered investment management firm DigitalArray ISAC Ltd has announced the inception of its DigitalArray fund platform.

The company said the platform enables select investment firms in the digital asset space to launch new funds quickly and inexpensively with the support of top service providers.

DigitalArray also announced the launch of the initial fund on the platform, Alpha Sigma Capital (Offshore) ISA.

Enzo Villani, chief investment officer and managing partner at Alpha Sigma Capital Fund, LP, said: “Establishing the Bermuda entity with DigitalArray was an important step in providing access for our international limited partners and investments. We leverage best-of-breed infrastructure partners for our funds so we can focus on performance.”

DigitalArray’s president, Lawrence Newhook, added: “With the explosive growth in digital assets, we saw an opportunity to harness unique sources of outsized return from these markets. We created DigitalArray to enable investors to access these cutting-edge offerings with the institutional-quality support and infrastructure that had largely been lacking in this burgeoning niche within asset management.”

The company said the DigitalArray platform offers the efficiency and economies of scale of a fund platform, providing uncommon flexibility through an innovative structure which can accommodate virtually any type of regulated fund. This includes both open and closed-ended, SPVs, masters and feeders taxed as US partnerships or corporations, as well as funds marketed towards institutional or ultra high net worth investors globally.

Nicole Biernat, chief operating officer, said: “Many of the new digital asset managers have a knowledge base and networks in the crypto world but are unfamiliar with the structure, operations and regulations of the asset management industry.

“We realised that combining our team’s deep expertise in running asset management businesses with the ability of these portfolio managers to extract extraordinary uncorrelated returns would create investment funds that would appeal to institutional investors—paving the way for the digital asset space to be taken to the next level.”

Sarah Demerling, a partner at law firm Walkers (Bermuda) Limited, said: "Bermuda has been a pioneer in the fintech space and has been recognised internationally as one of the global leaders to combat money laundering and the financing of terrorism.

“The Government of Bermuda set the stage for developing the island's fintech sector in early 2018 with cutting edge digital asset legislation and has seen incredible success. It is only natural that funds looking to invest in this area are choosing Bermuda. We were delighted to work alongside the DigitalArray team in creating this unique solution."

David Burt, the Premier, said: “We are very excited by the launch of the DigitalArray investment platform, which demonstrates the interconnectivity of Bermuda’s expanding fintech ecosystem, and the value of reducing friction and fostering integration of digital asset expertise into the traditional financial institutions.

“The Government of Bermuda has remained focused on providing a clear risk management framework that enables firms like DigitalArray ISAC Ltd to be innovative and build the future of finance here in Bermuda.

“The growth of Bermuda’s fintech sector is dependent upon the successful interplay between traditional financial institutions and digital asset business.

“DigitalArray are a valued addition to the expanding network of companies driving innovation in Bermuda.”

DigitalArray ISAC Ltd said it is a global asset management firm designed to provide institutional and ultra high net worth investors access to diverse sources of true alpha from the digital asset markets, including cryptocurrencies, blockchain technologies and defi markets.

It said its core team consists of talent from blue chip firms across the investment industry, including Goldman Sachs and Point72 Asset Management.

The company was founded in 2021 and is headquartered in Bermuda.

DigitalArray said it does not conduct “digital asset business activities” as such term is defined under Bermuda's Digital Asset Business Act 2018 that would require it to be licensed under DABA. DigitalArray has therefore not applied for and is not licensed under DABA, it said.

Digital Array said the Alpha Sigma Capital (Offshore) ISA fund is an incorporated segregated account of the DigitalArray ISAC Ltd and is regulated by the Bermuda Monetary Authority as a Class B Professional Fund.

The fund is managed by Alpha Sigma Capital Advisors, LLC, a US-based investment advisor, and provides investors with exposure to an array of digital assets and equity investments in digital asset companies.

Alpha Sigma Capital Advisors was founded in 2020 by Mr Villani.

Sarah Demerling, partner at Walkers Bermuda (File photograph)
Lawrence Newhook, president of DigitalArray (Photograph supplied)
David Burt, the Premier (File photograph by Akil Simmons)
Enzo Villani, chief investment officer and managing partner at Alpha Sigma Capital Fund, LP (Photograph supplied)
Nicole Biernat, chief operating officer of DigitalArray (Photograph supplied)

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Published September 20, 2021 at 7:32 am (Updated September 20, 2021 at 7:32 am)

Efficiency and economies of scale in new fund platform

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