NapoleonX Newsletter — July 08, 2020.
Dear Napoleonians,
June was a dull month for cryptos with a persisting trading range that saw price moving slightly down (c. -3.0%) over the month on reduced volumes. After the run we had since mid-March, this was to be expected at some point. Let’s just hope that we do not fall asleep watching our screens during the summer.
In the context of slightly down markets, our short term trend following strategies (ETH.BTC.USD AR) did not work so well as was the case in H2 2019. However, the Long Only strategies resisted quite well as they have been in neutral mode for some time and avoided unnecessary trading.
We are still inclined to believe that this trading range should be concluded by a breakout on the upside for crypto prices and that it should accelerate nicely at some point.
Sales activity
In this context, we are still feeding discussions with the prospects earlier mentioned, trying to convert firmly their interest into inflows.
In terms of prospects, we are newly discussing with a family office set in Johannesburg, 2 French financial advisors (one based in Noumea, one in Paris), a Swiss AM covering the French institutional market and a French Bluechip Corporate (we have been introduced by a member of the community, many thanks to him!) for its treasury management. Nothing is done yet but still fighting to attract new investors into the cryptosphere.
In terms of structuring and business development, we have explained in the latest Newsletter that we were exploring the possibility of transforming the BTC market access fund into a BTC Long Only fund implementing the BTC Long Only Strategy.
This has operational consequences as well as legal ones. We are currently in negotiation with our custodian to modify the fund’s investment objective and issue a new share class, embedding a notional of 25k€ and performance fees. Indeed, as of today our existing fund only has management fees.
On top of this first fund, we are finalizing the marketing materials for the DAF#2 implementing the ETH/BTC/USD LO Strategy in partnership with a well-known AM in the crypto industry. As explained, this fund will be an offshore one and be distributed to North America professional investors.
The DAF#1 evolution and the DAF#2 should be live before the end of the summer.
Management fees
Like every quarter, we accrue management fees on each NPX account dashboard. For the few ones above the threshold, we will issue payment early August as per our process.
Conclusion
We are still on the path to have our 2 first DAFs up and running in the next few weeks. The price momentum is still positive and should remain so over at least the next 12–18 months.
These DAFs should benefit from potential investor's appetite as they present unique strategies not available for such vehicles in the market. As per the consolidation period that is not really favorable to short term trend following strategies, it never last, so we should soon break out of this boring trading range.
The NapoleonX Co-Founders
