Prime Factor Capital, First Regulated UK Crypto Hedge Fund, Affirms Readiness Despite Early Institutional Interest
The Financial Conduct Authority (FCA) has released the first license ever to a crypto hedge fund in the U. K. this week. Prime Factor Capital, the company that received it, can be considered an important pioneer in the industry for receiving such important permission.
Prime Factor Capital, which will be fully based in London, will operate as a full-scope Alternative Investment Fund Manager under the current rules of the European Union. The company was created by former BlackRock employees and it was originally launched back in 2017, before the crypto mania.
With the use of this new license, the company will now be able to manage over $100 million EUR in assets. Without the license, no company can operate more than that amount for institutional investors, but they can manage smaller amounts of money.
According to a recent interview of the CEO Nic Niedermowwe to The Block Crypto, the company is doing everything in its power to be able to give all the assistance to the new institutional investors, who are often not accustomed to the crypto market.
To the CEO, the approval was a major milestone for the development of the company. He also affirmed that the crypto space would be considered positively affected by this, as the company is a pioneer in its area. He said during the interview that investment management is all about trust and that the crypto market does not enjoy a lot of trust at the moment.
There are simply too many offshore options and even some illegal or unregulated ones, so most traditional investors are not willing to risk any problems with the law.
The next major step now is for the company to appoint a depositary that will have an independent oversight over the assets of the company, a requirement made by the EU.
According to Niedermowwe, the choice of London was mostly made because the city has a very strong regulatory record so, if they were able to get the license, they knew that they would have the trust of the investors soon. There was also a lot of investors in the city, so this was another major reason for moving there in order to start the crypto business for institutional investors.
However, you should not think that the company is fully satisfied in being set only in London. There is already some conjecture being made on whether the company should open its doors to the rest of the continent or not. If this happens, the products of the company will possibly be offered in other European countries as well.
Even with all the anxiety related to the Brexit process, the owners of the company seem pretty confident that the business will be well. According to Niedermowwe, this new license is another important stepping stop in institutionalizing crypto.
To Niedermowwe, institutional investors are still not ready for this market, but they will be soon and, when that happens, Prime Factor Capital will certainly be ready for them.