36% Hedge Funds and 32% Managers with $10 Billion in AUM Anticipate to Enhance Crypto Publicity: EY Survey
Because the trade higher understands the asset class, “the alpha-generating alternatives will definitely create extra incentive for various fund managers to take part on this technique.”
Just one in 10 managers presently have publicity to cryptocurrencies, based on a survey revealed on Monday by one of many massive 4 accounting companies Ernst & Younger. However the good factor is companies are planning to extend their publicity within the coming yr.
Whereas 10% of the hedge fund managers have publicity to crypto, a mere 4% of the non-public fairness managers are presently reporting crypto allocations by numerous means corresponding to crypto derivatives, itemizing funds, and crypto firms. AUM devoted to crypto additionally stays small, at 1%-2% for hedge fund managers.
However within the subsequent one to 2 years, greater than 20% of institutional traders and 25% of hedge fund managers mentioned they anticipate to extend their publicity to cryptocurrencies.
Amongst these traders, the most important managers are most certainly to extend their publicity, with 36% of hedge fund managers which have over $10 billion in AUM and 32% of managers with $2 billion – $10 billion in AUM reporting that they anticipate to extend their crypto AUM, as per the report.
In relation to boundaries to investing in crypto, the primary was that crypto doesn’t align with their funding technique, adopted by volatility, regulatory uncertainty, lack of expertise of crypto, and immature market infrastructure.
Tax implications, lack of appropriate funding alternatives, crypto not being ESG-friendly, and crypto being a bubble had been the bottom components stopping them from investing in crypto property.
Greenwich Associates performed the survey from July to September 2021 that polled 264 various institutional traders collectively holding about $5 trillion.
“2021 seems to be an inflection level the place this asset class is gaining the eye of all institutional various fund managers,” notes the research. It additional provides that various fund managers have grow to be extra lively contributors in crypto property, drawn by uncorrelated returns and continued funding in institutional-grade infrastructure to help the area.
“Because the trade and regulators proceed to higher perceive this asset class, the alpha-generating alternatives will definitely create extra incentive for various fund managers to take part on this technique.”