Swiss Neobank Sygnum Restructures Crypto Fund to Attract Institutional Clients

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As a seasoned analyst with over two decades of experience navigating the dynamic world of finance and digital assets, I find Sygnum’s recent transformation of its Yield Core AMC fund into a Luxembourg-based Reserved Alternative Investment Fund (RAIF) to be an astute move in response to the growing institutional interest in yield-generating crypto investments.

Sygnum, a significant force in the digital asset banking industry, has transformed its Yield Core AMC fund into a Reserved Alternative Investment Fund (RAIF) structure based in Luxembourg. This change makes the fund an appealing choice for hedge fund managers and investment firms.

As per an announcement made on Thursday, October 31st, this transition aims to cater to the growing interest from institutional investors seeking safe and profitable cryptocurrency investments. The RAIF structure not only bolsters investor protection but also simplifies global distribution, thereby enhancing the company’s standing in the burgeoning economy.

Yield Core AMC Now Better Suited for Investors

Initially, the fund was primarily recognized for its involvement in crypto yield strategies such as lending, arbitrage, and liquidity provision. But by shifting to a RAIF structure, Yield Core now provides stronger governance and solid asset protection, minimizing counterparty risk and enabling shared ownership of underlying assets. This transformation offers a more stable and transparent environment for significant investors.

Based on Sygnum’s report, the fund currently manages close to $30 million in assets. In order to attract more global investors, the fund is planning to expand into new markets, including Singapore.

Markus Hämmerli, a top executive at Sygnum, stated that moving Yield Core into the Luxembourg RAIF structure represents a significant advancement in our continuous mission to deliver superior crypto yield products to an expanding investor audience. This strategic shift enhances both investor protection and convenience while also bolstering our global distribution channels. In essence, this action underscores Sygnum’s dedication to pioneering the development of innovative Future Finance solutions within the digital asset sector.

99% of Sygnum’s Customers Supports Fund Transition

The shift of Yield Core into RAIF format gained nearly unanimous backing from Sygnum’s current investors, with 99% giving their approval for this change. This transformation reflects a high level of faith in Sygnum’s risk-reward strategy and the success of Yield Core, as evidenced by its impressive Sharpe ratio of 2.7 over the last two years.

Hauck & Aufhäuser Innovative Capital, as the Alternative Investment Fund Manager, endorsed the action. They collaborated with a bank in managing the compliance and regulatory matters of Yield Core.

In response to the fund’s reorganization, Stephan Edelmann, the company’s managing director, stated that their collaboration with Sygnum offers investors a chance to venture into the growing asset class while maintaining trust and adhering to regulations.

Sygnum announced that the fund can be accessed by professional and institutional investors via their platform directly. Additionally, it can be reached indirectly through unnamed custodial partners. Future expansion of availability is planned for specific regions.

Institutional Investors Demand More Products Tailored to their Needs

Simultaneously, the transformation of Yield Core AMC occurs at a point when the institutional interest in cryptocurrency investment goods is surging. This increase can be attributed to the introduction of Bitcoin and Ethereum exchange-traded funds (ETFs).

As an analyst, I’ve recently come across some fascinating insights from a survey conducted by EY-Parthenon. The digital assets and crypto sector is experiencing unprecedented institutional interest, with a staggering 94% of respondents expressing their long-term faith in this industry. These seasoned investors are urging service providers to expand their offerings, focusing on institutional-oriented capabilities, so they can seamlessly engage in the market.

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2024-10-31 15:36