Huobi Asset Management, a subsidiary of Hong Kong-listed Huobi Tech, has launched four crypto funds, providing traditional asset managers with new ways to invest in bitcoin, ethereum and the booming crypto mining businesses.
The new offerings include a private equity fund in the global crypto mining businesses, an actively-managed crypto fund and two funds which will invest directly in bitcoin and ethereum. The funds are open to institutional investors such as family offices, asset managers and high-net-worth individuals.
Huobi Tech is the latest to attract asset allocators from the traditional financial services industry in Hong Kong. In September 2019, the city’s financial watchdog, the Securities and Futures Commission (SFC), put forward a clear regulatory framework for crypto assets and started doling out virtual asset licenses to crypto trading platforms, custodians and crypto fund managers.
The move came after Huobi Tech acquired the virtual asset license from SFC in March, which allows the firm to set up and operate funds whose underlying assets are cryptocurrencies.
Huobi Tech, formerly known as the public electronic appliance company Patronics, was acquired by crypto exchange Huobi’s founder Leon Li through a reverse takeover in 2018.
The crypto asset manager has secured $50 million across the four funds and aims to double funding in the near future, Lily Zhang, CFO of Huobi Tech, told CoinDesk in an interview.
The private equity fund will invest in a variety of mining services along the supply chain, including mining machine manufacturers, mining pools and mining farm operators in China and the international market, according to Zhang.
While the PE fund will not invest in public crypto mining companies such as Riot or Hut8, its actively managed crypto fund, Multi-Strategy Virtual Assets Fund, plans to allocate 10% of its investment to such companies. Zhang declined to disclose the management fees for the four funds.
“The bitcoin and ethereum tracker funds are fully compliant under the financial regulations in Hong Kong and give traditional investors a more liquid and compliant channel to directly invest in cryptocurrencies,” Zhang said, noting these tracker funds will allow investors to withdraw their shares.