3rd Annual Global Crypto Hedge Fund Report 2021

Key findings

Around a fifth of hedge funds are currently investing in digital assets (21%) with on average 3% of their total hedge fund AuM invested.
86% of those hedge funds intend to deploy more capital into the asset class by the end of 2021.
Around a quarter of hedge fund managers who are not yet investing in digital assets confirmed that they are in late-stage planning to invest or looking to invest (26%).
In terms of the main obstacles to investing, regulatory uncertainty is by far the greatest barrier (82%). Even those who do invest in digital assets cite it as a major challenge (50%). Client reaction/reputational risk is high (77%) as well as digital assets being outside the scope of current investment mandates (68%). Over half of the respondents said that they don’t have enough knowledge of digital assets (64%).
64% of respondents said that if the main barriers were to be removed they would either actively accelerate investment in digital assets or potentially change their approach and become more involved.

James Delaney

Managing Director, Asset Management Regulation, AIMA
Henri Arslanian

Co-Founder & Managing Partner, Nine Blocks Capital Management
James Stickland

CEO, Elwood Asset Management

About the research

This year, AIMA was invited to partner with PwC and Elwood Asset Management on their 3rd annual crypto hedge fund report to provide insights into the rising interest in the digital assets industry from the perspective of non-crypto focused hedge funds (referred to as ‘Traditional’ hedge funds in this report).

AIMA’s chapter within this report looks at whether “traditional” hedge funds have investments in digital assets, their views on the growing asset class and what they believe would be the catalysts for them to invest initially and more significantly in digital assets.

The data contained in this chapter comes from a survey that was conducted in the first quarter of 2021 with 39 hedge funds that accounted for an estimated US$180 billion in Assets Under Management (AuM). More than 60% of the responses were from hedge funds who manage assets of at least US$1 billion.

Thanks to AIMA DAWG

This survey was put together with the assistance of the AIMA Digital Assets Working Group (DAWG) – a cross-section of senior industry experts including fund managers, allocators, custodians, exchanges, lawyers, consultants and other service providers.

The AIMA DAWG is tasked with driving regulatory engagement, thought-leadership initiatives and operational guidance in the area of digital assets. It encourages thought-leadership across the industry and shares innovations with market participants and regulators to create a feedback loop that encourages the institutionalisation of digital assets.

We would like to thank everyone that participated in the survey and shared their insights. If you would like to learn more about AIMA DAWG, please contact James Delaney ([email protected]) or Michelle Noyes ([email protected]).