Family Office allocations are growing in hedge funds and with crypto through better SEC guidelines
10,000 & $15 Trillion!
PRnewswire references recent research by family office networks advising that 10,000 family offices with an aggregate of $15 trillion of assets are allocating more towards hedge funds. It quotes that “more capital is being allocated to traditional Long/Short, Global Macro and Managed Futures strategies as family offices seek to hedge against recent volatility in the marketplace. In addition, FON is seeing newer strategies grow in popularity for investment such as blockchain, artificial intelligence and cannabis funds.”
1 in every 10 are Allocating to Crypto
As this interest grows to preserve capital, allocations are still going beyond hedge funds. As a matter of fact, institutional investor states that 1 in 10 allocators plan to invest in crypto. Here is an interesting excerpt from their article “Of 400 allocators surveyed at the January 31 to February 2 event, around 11 percent predicted allocating to crypto funds in 2018. The respondents included staff from funds-of-hedge-funds, consulting firms, endowments, foundations, sovereign wealth funds, pensions, and family offices representing a combined $5 trillion under management. At least a quarter of the respondents were from family offices, according to a spokesperson for Context Capital Partners, who declined to further break down the sample. Although 71 percent of the surveyed allocators had no plans to invest in crypto funds, the results show greater interest than previous surveys have. Endowments and foundations polled by consulting firm NEPC in February had been overwhelmingly against cryptocurrencies, with 96 percent saying that they did not invest in electronic currencies like Bitcoin and had no immediate plans to do so.”
Why crypto hedge funds are different?
Coindesk walks through a couple great examples where there are hybrid crypto funds that actively trade & also make venture investments either as equity or tokens in deals. The traditional hedge fund expectation is to also see shorter term performance when it comes to investments, opposed to traditional VCs who are at a 5–10 year horizon to allow a company to mature towards a later stage liquidity event.
Who the heck is the “Crypto Mom?”
This is none other than Hester Pierce who is the commissioner of the SEC. Hester got this name when she opposed the SEC’s decision to reject the bitcoin etf for the Winklevoss twins: article here>>. She advises that the SEC has been quick to create regulations when they should make sure that they are not slowing down innovation just because the word “crypto” is being thrown around. Another interesting point she made was that the delay in some of these regulations could allow for more innovation to make broader headway.
