Super funds need to get on board with crypto

April 13, 2021

Elizabeth McArthur, Financial Standard. April 12, 2021. See the AFR article here.

Ahead of the launch of his new digital assets fund, investment banker Mark Carnegie has warned that Australian super funds need to get on board with cryptocurrencies.

Carnegie is launching the MHC Digital Asset Fund, in partnership with blockchain expert Sergei Sergienko. The fund will target 30% returns after fees, taking a multi-investment asymmetrical strategy aiming to maximise returns while safeguarding investors' principals.

Speaking to Financial Standard, Carnegie said while the fund is drumming up interest there is still hesitance from super funds.

Carnegie said he and his team have spoken with super funds and there has been some interest, but it seems funds are not clear on how they want to progress.

Asked what he thought the main reservation from super funds on crypto is, Carnegie said: "They think it's all bullshit... They think it's a bubble, they've seen this stuff before."

But he added that he believes super funds will have to get on board with crypto eventually, which is why he's betting the way he is.

"I'm a grumpy, nearly 60-year-old guy and now I have to learn from all these tech-savvy 20-year-olds. It's not a particularly comfortable place to be," he said.

"But it's been made easy by the fact that central banks all around the world have just been printing so much money and borrowing so much. Yes, people can argue that there are problems with Bitcoin but there are also problems with what central banks are doing."

Carnegie said the fund has seen significant interest but "as far as who is going to write a cheque, we don't know".

"Everybody wants to talk about crypto but a lot of people are going just prefer to buy some Bitcoin," he said.

"Go to Coinbase, get a wallet, buy some Bitcoin, I understand why that's a rational strategy as well as an established strategy - HODL stands for hold on for dear life. This fund is for people who can not do that, who acknowledge that if the market blows up, they're going to get scared and risk selling at the wrong time.

"We're hoping to be able to do better for investors who feel like they want to sleep a bit better at night."

The fund is open to wholesale clients, has a minimum investment of $50,000 and management fee of 2% plus a performance fee of 25% of the return (based on fund NAV) subject to delivering investors a cumulative net 10% IRR post all fees.

It will have a 45% to 75% allocation to cryptocurrencies including Bitcoin and Ethereum, 30% to 60% stablecoin denominated decentralised finance (DeFi) strategies, 10% to 15% early entry tokens and/or direct equity in blockchain business and up to 15% DeFi optimisation.

Contact us