Tech panel see digital asset comfort level emerging
Investors are becoming more comfortable investing in digital assets, attendees at the third annual International Tech Summit heard.
Lawrence Newhook is the president and chief investment officer of Bermudian-domiciled investment management firm Alpha Innovations Ltd, which he said is “at the crossroads of asset management and blockchain”.
Mr Newhook said: “One of the key things is the market is becoming more institutional.
“Going back five years ago, if you wanted to invest in a crypto vc (venture capital) fund or hedge fund, it was really kind of dark ages in terms of the sophistication of these operations.”
But now, he said, institutional service providers, institutional finance administrators and brand name fund auditors have entered the space.
Mr Newhook, who comes from an institutional background, said: “Five years ago, even three years ago, I don’t think there is any digital asset fund that I would even think about putting in front of my investment committee. I would get laughed out of the room.
“Now, it’s becoming much more institutional and people and investors, and institutional investors in particular, are getting more comfortable with the asset class.”
Brian Tehako, who has a bond trading background, is the chief investment officer at Warwick Capital Management Ltd, the Bermudian-based digital asset hedge fund manager whose flagship offering is the Horseshoe Bay Fund.
He said investors are facing inflation, stock market risk and currency risk – even more so after Russia’s invasion of Ukraine – and beginning to understand that the digital assets market is the new wave.
Mr Tehako added: “You are starting to see that quicker adoption of people willing to put a toe into it, to step out and understand it.”
Carol Pepper, the founder and chief executive officer of New York-based family office and consulting firm Pepper International, said family offices are so far, taking a different approach to this relatively new asset class.
She said the younger generation in the families of her clients is pushing the digital assets market.
Ms Pepper said: “The nexgens all got (digital) wallets quite a while ago, and have done very well trading around with small amounts of money into the various coins, for example.
“There is a section of family offices where the young kids love it and they are promoting it to their parents and to the family office managers who tend to be an earlier generation and have been much more sceptical. So there is some push coming up.”
But she added: “Most family offices are looking for ‘selling shovels during the gold rush’. How can we support the infrastructure?
“How can we not be necessarily in the coins, but in everything around the coins so that we can make money on this new thing that is emerging while we wait and see how it actually emerges?”