Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop. (Rick Bowmer, AP, file)
Hong Kong - Jehan Chu says he’s got an early-mover advantage that will help his cryptocurrency fund stand out from the crowd.
The Hong Kong-based former art adviser started investing in
bitcoin in 2013, when the digital asset saw its first major rally. Since
then, prices have quadrupled, enabling Chu to quit his job, start a
venture capital firm investing in blockchain technologies last year -
and now, launch a cryptocurrency fund that’s seeking to raise $100m.
Part of that money is already in the bank and Chu has started
His Kenetic Capital is among a slew of firms that are lining up at
the new frontier after soaring prices and proliferation of initial coin
offerings - sold by corporates to raise money - boosted demand for
digital assets. Chu, whose fund is advised by ethereum co-founder
Vitalik Buterin, says he isn’t interested in speculation, but rather in
tokens sold by companies with strong fundamentals and long-term
“When we make a call for what we think is a good investment, it’s not
because we think it’s a speculative play,” Chu said in an interview in
Hong Kong. “It’s because we’re looking at the fundamentals based on
years of experience.”
While the largest cryptocurrencies have all seen eye-popping rallies
this year, it’s also a volatile market, prone to hacking and regulatory
changes. One of the most salient issues now, for instance, is whether
ICO tokens - which CoinDesk data show have raised $1.8bn for
startups so far - will be subject to
A rally in bitcoin has stalled after its price reached a record high
last week, although it rose 0.7% on Thursday to $4 161.26. And
bigger swings may be on the horizon as the cryptocurrency - which
already split into two in August amid infighting over the underlying
technology - may see
another bifurcation soon.
Still, many finance professionals are taking advantage of increased
Lewis Fellas, a former portfolio manager at Harvard University’s
endowment fund, is seeking to raise $200m for a cryptocurrency
hedge fund, Bloomberg News
reported last week. And technology billionaire
Mark Cuban is
investing in 1confirmation, a fund that plans to raise $20m to
invest in blockchain-based companies.
Chu’s Cayman Islands-registered cryptocurrency fund has drawn
experience from Wall Street. His partners are Stephan Verhelst, former
managing director in investment banking at HSBC, and
Lawrence Chu, co-founder of BlackPine Private Equity Partners and former
fund manager at UBS O’Connor. Jehan Chu himself was a developer at
Sotheby’s before becoming an art adviser to wealthy investors.
Chu said his clients mostly comprise of family offices and wealth
angel investors. Kenetic Capital offers protection against hacking,
offers hedge fund strategies and early access to ICOs, he added. The
fund charges a traditional 2-and-20 fee structure.
“We have a different level of access to tokens than the average
person off the street,” Chu said. “We have relationships and we add
value to these teams and these businesses and companies that we’re
committed to longer term.”
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