MHC Digital Asset Fund
Wholesale Investors Only

MHC Digital Asset Fund

MHC Digital Asset Fund

Aims to provide a secure broad exposure to the cryptocurrency ecosystem. (For Wholesale Investors Only)

MHC Digital Asset Fund
Min. Investment
$50,000
Objective
Growth
Structure
Managed Fund
Asset Class
Currency, Crypto and ICO
Liquidity
Unlisted liquid
Closing Date
Open Ended
View More Details
Min. Investment
$50,000
Objective
Growth
Structure
Managed Fund
Asset Class
Currency, Crypto and ICO
Liquidity
Unlisted liquid
Closing Date
Open Ended
Industry
Cryptocurrency & Blockchain
Funding Stage
Unlisted Early-Stage Fund
Security Type
Unit in a trust
Target Capital
N/​A
Availability
Open for investment

Management Fees
2.0% p.a. of NAV
Performance Fees
25% of return once hurdle achieved
Hurdle
Cumulative net 10% IRR
Investment Time Frame
Long Term
Redemptions
Yes (subject to exit fees < 2 years)
Distributions
Annually

The Fund seeks to deliver exceptional returns for Investors through an actively managed portfolio of digital assets. There is no assurance or guarantee that the Fund will meet its investment objective.
 
The Fund’s investment strategy is to take advantage of the opportunities in the global digital asset space (both established and emerging) through a multi- investment asymmetrical strategy which aims to maximise the Fund’s returns whilst safeguarding the principal invested through prudent asset allocation and decentralised finance innovations.

The Fund’s investment strategy is focused on monetising opportunities in the global digital asset space through a multiinvestment asymmetrical approach which aims to maximise the Fund’s returns whilst safeguarding the principal invested through prudent asset allocation.

 

The Fund uses an active approach that combines both traditional financial funds management and digital asset expertise to invest across the spectrum of opportunities available in the digital ecosystem. This includes:

  • investing into digital assets and protocols across a range of products (including spot and derivatives) available through a network of liquidity providers ranging from centralized exchanges, decentralized exchanges and over-the-counter providers; and
  • sourcing and executing other opportunities with correlation or exposure to identified themes within the sector available through traditional financial investment products.

By combining active asset allocation with institutional grade custody, monitoring and risk management systems, the Manager believes strong risk-adjusted returns can be delivered.

 

 

Portfolio Composition

The Fund has been established to provide exposure to a portfolio composition combining both larger, more liquid digital assets (such as Bitcoin (BTC) and Ethereum (ETH)), as well as a small allocation for higher risk opportunities that aim to provide significant outperformance. The Fund will also hold an allocation to market neutral, fixed income and special situation strategies to mitigate against digital asset volatility and/or improve overall Fund performance. The target composition of the Fund’s portfolio is set out below.

 

Asset Class Investment Exposure Range*
Larger, more liquid cryptocurrencies (such as BTC and/or ETH) 40 - 75%
Stablecoin denominated staking strategies, fixed income investing and market neutral trading 20 - 60%
Alternative opportunities  0 - 20%

 

* The Manager may change the investment strategy, asset allocation ranges and processes of the Fund, provided that the changes are not inconsistent with the terms of the Trust Deed and the Management Agreement. Unitholders will be notified in writing if any such change is considered by the Trustee to be material or would not have been reasonably expected by Unitholders. Any material change to the Fund’s investment strategy or asset allocation ranges as a consequence of a change in market conditions will require the prior approval of the Fund’s Investment Committee.

 

Larger, more liquid cryptocurrencies (such as BTC and/or ETH)

Between 40% and 75% of the Fund will be exposed to larger, more liquid cryptocurrencies (such as BTC and/or ETH), held either directly or through DeFi strategies.


The Manager will utilise a combination of ‘over the counter’ services and exchanges for acquiring holdings in such cryptocurrencies and, if relevant, will seek the most appropriate liquidity pool providers to minimise transaction costs and fees whilst maximising yield.

 

Larger, more liquid cryptocurrencies (such as BTC and/or ETH) 

Between 40% and 75% of the Fund will be exposed to larger, more liquid cryptocurrencies (such as BTC and/or ETH), held either directly or through DeFi strategies.


The Manager will utilise a combination of ‘over the counter’ services and exchanges for acquiring holdings in such cryptocurrencies and, if relevant, will seek the most appropriate liquidity pool providers to minimise transaction costs and fees whilst maximising yield.

 

Market Neutral and Fixed Income Strategies

Between 20% and 60% of the Fund will be allocated to market neutral and fixed income strategies which give non-directional exposure to products mitigating against typical digital asset volatility.


Market neutral trading strategies utilize a variety of derivative and cash products to profit from non-directional pricing dislocation and market inefficiency. Combined with DeFi strategies, market neutral trading can help hedge the Fund against market volatility.

 

Fixed income strategies include:

  • Investments in centralized and decentralized yield-bearing products within the digital ecosystem (typically denominated in stablecoins). Stablecoins are a type of cryptocurrency that are designed to maintain a stable value by being pegged to a specific asset or basket of assets. As a result, they are typically less volatile than other cryptocurrencies. The Fund uses stablecoins to invest in yield-bearing projects, providing an alternative, fixed-income return profile for the portfolio whilst also insulating from exposure to overall market volatility.
  • Opportunistic allocation to other fixed income products (e.g corporate debt) of companies with exposure to the digital ecosystem.


Alternative opportunities

Between 0% and 20% of the Fund can be allocated to alternative digital asset opportunities, namely investments in early-stage tokens, emerging blockchain companies, special situations (including distressed credit investments)*, and direct equity investments into companies with exposure to blockchain. This allocation is intended to give scope to invest in higher-risk, esoteric investments whereby the Manager sees opportunities to improve the diversification and aggregate return profile of the Fund without undermining overall risk concentration or performance.

 

DeFi and Staking Strategies

Up to 100% of the Fund may be exposed to DeFi strategies with the objective of producing above market yields. The Fund’s DeFi strategies primarily consist of staking strategies, including but not limited to, validator staking, liquidity staking and lending staking. Other DeFi strategies implemented may include the arbitraging of inter-market dislocations across different markets.

 

The Fund may lend crypto assets to liquidity pools (liquidity pool staking) to offer liquidity to decentralized exchanges in exchange for additional returns.

 

The Fund may also lend crypto assets to lending pools (lending staking) to receive interest paid by borrowers. The Fund may directly or indirectly participate in validator staking pools as part of a Proof of Stake network’s consensus mechanism. By participating in such networks, an investor (such as the Fund) is able to generate additional returns on staked assets.

 

When using these strategies, the Manager utilises a combination of yield aggregating protocols to ensure ‘rewards’ (yield) returned as part of the staking process is continually reinvested, ensuring maximum yields are achieved and further, significantly reducing gas (transaction fees) and exposure to the price movements of the ‘reward’. The main protocol used for yield aggregation is Beefy Finance.

 

Storage

The Fund’s digital assets will be stored in either staking pools, exchange wallets, cold storage, multi-signature wallets or by a third-party custodial services provider approved by the Trustee, depending on the type of asset and how those assets are being used to generate returns.

Redemptions may be requested by Unitholders, which may be accepted at the discretion of the Trustee. The redemption price will be the current unit value calculated by reference to the valuation on the relevant Redemption Date. 

 

The Trustee will be entitled to an “Early Withdrawal Fee” for redeeming Ordinary Units within two years of an Investor making their investment. The Early Withdrawal Fee is calculated as follows:

 

1st year: Where the redemption is made during the first year of the period of two years from the date of an Investor making their investment (“Early Exit Period”), 2% of the Fund’s Net Asset Value on a per Unit basis, for each Unit redeemed;

 

2nd year: where the redemption is made during the second year of the Early Exit Period, 1% of the Fund’s Net Asset Value on a per Unit basis, for each Unit redeemed;

 

Following the end of the Early Exit Period – nil.

  • The Fund has continued to significantly outperform the broader cryptocurrency market since inception.
  • The Manager has successfully minimised volatility to deliver attractive risk-adjusted returns to investors through the stated strategy.
  • No assets were lost during the collapse of FTX, a testament to the professionalism and foresight of the team.

 

Digital Asset Fund* & Industry Returns (Indexed)

 

Performance Evaluations to December 2024

 

Using data from inception to date. Performance metrics calculated according to Standard Deviation and Sharpe Ratio Morningstar Methodology Paper, 2005.
*Including fees. Past performance is not indicative of future performance. Returns include isolated venture investment which was subsequently siloed into separate fund.
^ The S&P Cryptocurrency LargeCap Index is a subset of the S&P Cryptocurrency Broad Digital Market (BDM) Index designed to track the constituents of the S&P Cryptocurrency BDM Index with the largest market capitalization.

MHC Digital Finance Pty Limited is a focused Australian digital currency and emerging technology asset manager with a unique mix of digital asset and traditional financial funds management expertise. The Manager is an active investor looking to keep ahead of trends in a rapidly developing sector. The Manager applies a disciplined and methodical approach to managing investments through a continued assessment of risk and performance of its investment strategies.


The Manager was appointed as investment manager of the Fund under the Management Agreement. 


The Manager is wholly owned by MHC Digital SG Pte Ltd. MHC Digital SG was established in 2022 to bring a comprehensive digital asset offering to the market. It currently comprises three active business units across global markets, venture capital and funds management. A fourth complimentary business unit, Corporate Finance, is currently in the early stages of development.

 

Mark has more than 30 years of experience as an entrepreneur, investor and corporate advisor in New York, London and Sydney. From 1990 to 2000 Mark was the Australian and Asian representative of  Hellman  &  Friedman following his training on  Wall  Street with  James  D.  Wolfensohn and,  in London, at Hudson Conway with Lloyd Williams.

 

In 2000 Mark co-founded the leading Australian boutique corporate advisory and private equity firm Carnegie, Wylie & Co Pty Limited with John Wylie. Carnegie Wylie was acquired by leading Wall Street bank,  Lazard Inc in  2007, and following the sale,  Mark was appointed the  CEO  of  Lazard Australia Private Equity.

 

Throughout his career, Mark has been involved in a  range of diverse Australian and  Asian investments and has participated in groups that have acquired major stakes in the  Courage Pub Estate,  John  Fairfax  Holdings, Hoyts  Cinemas,  Formula  One Holdings,  SCTV,  Macquarie  Radio Network,  Lonely Planet Publications and London Sumatra Plantations. As a corporate advisor, Mark has advised Qantas and Coles Myer on general strategic matters, Westfield on its A$22 billion merger and Qantas on its JetStarAsia start-up in Singapore.

 

Mark holds a BA from Oxford University and a BSc (Hons) from Melbourne University.  He is a former Treasurer of the Oxford Union.

 

Andrew Palmer is the Portfolio Manager within Funds Management at MHC Digital Group, where he focuses on asset allocation within the portfolio with particular attention on the liquid end of the cryptocurrency market.

 

Andrew has always focused on the new and emerging segments of the financial landscape and optimising the opportunities presented as financial technology evolves. In 1996 he joined JPMorgan’s innovative structured products group and was instrumental in developing the then nascent credit derivative and securitisation markets. In 2002, Andrew moved to London where he became CEO of Scotia Capital Europe running the wholesale banking businesses in Europe and Asia for the second largest bank in Canada. His risk management and trading experience was central to navigating the bank through the credit crisis and emerging as one of the top 10 banks globally by market capitalisation.

 

In 2013 Andrew joined ANZ as Head of their Financial Institutions Group. The role spanned all products offered by the bank including lending, transaction banking and all markets products where he was the senior frontline sign-off on any credit extended by the bank to the finance industry.

 

Since leaving ANZ in late 2019, Andrew has become a consultant to newer technology driven players and investors in the finance industry by leveraging his broad international and domestic perspective and connections across financial markets.

 

Andrew has a Bachelor of Science from the University of Wales, a Masters in Economics University of Western Australia, and a MBS from Columbia University in USA.

 

Ed Carroll is Head of Global Markets and Corporate Finance, at MHC Digital Group and focused on leading the buildout of the MHC Digital Group business from Singapore. He has been actively involved in all aspects of the Group business plan and rollout from inception, including establishing strategic partnerships, licensing and regulatory engagement, recruitment and operational buildout for the firm.

 

Prior to joining Carnegie, Ed spent more than 10 years at Macquarie Group, most recently within the Infrastructure and Real Assets division. He brings broad-based experience including $5b+ M&A, divestitures, distressed credit investing, debt and equity raisings, platform bolt-on strategies, credit rating and capital markets strategy, treasury, and risk oversight functions.

 

Ed holds a Bachelor of Commerce from the University of New South Wales and a Master of Science from Singapore Management University.

 

Ed is a member of the Investment Committee.

Matt Millsom is a Director, Proprietary Trading, at MHC Digital Group and is focused on generating absolute returns from pricing inefficiencies in the crypto ecosystem.

 

Prior to joining MHC Digital Group, Matt spent more than 20 years in the equity & derivative trading departments of JP Morgan Chase, Deutsche Bank, CIBC & HSBC.

 

He brings broad-based sales and trading experience including derivative trading, equity arbitrage and capital markets book running.

 

He is a member of the Australian Institute of Company Directors, holder of the Financial Risk Manager Certification from Global Association of Risk Professionals and has a Bachelor of Science (Economics) from the London School of Economics.

 

Matt is a member of the Investment Committee.

 

Kate Thompson is General Counsel and Chief Operating Officer at MHC Digital Group. Kate has more than 20 years of experience as a corporate and legal advisor, specialising in mergers and acquisitions. She has worked closely with Mark for over 10 years.

 

Prior to joining M.H. Carnegie and MHC Digital Group, Kate was a Director of Lazard Australia and Senior Legal Counsel and Head of Compliance at Lazard Australia for both private equity and corporate advisory. Kate spent a number of years at law firms King & Wood Mallesons and Herbert Smith Freehills prior to joining Mark at Carnegie Wylie & Co.

 

In her role at MHC Digital Group, Kate is responsible for managing the relationships amongst the network of contacts that have been created over the years and she has proven time and time again a unique ability to manage complex personalities when the stress of a transaction is at its peak. She is also an active member of the funds’ deal teams where she is heavily involved in transaction negotiation, structuring and execution and has overall responsibility for all legal functions for MHC Digital Group.

 

Kate is currently Chairperson of Revtech Media, Saleslink Australasia and Carsingha Investments (owner of the Entertainment Quarter, Moore Park) and serves on a number of portfolio company boards.

 

Kate holds a Bachelor of Laws (Hons) from Bond University.

 

 

Ben Li is Chief Financial Officer at MHC Digital Group and oversees the finance function including fund administration, reporting, risk and compliance.

 

Ben has over 20 years experience, initially in chartered accounting and the last 10 years in senior finance roles in financial services and private equity. Prior to M.H. Carnegie and MHC Digital Group, he was responsible for the finance function of Lazard Australia’s private equity funds.

 

Ben has a Bachelor of Commerce (Accounting and Finance) from University of Sydney and is a member of Chartered Accountants Australia & New Zealand.

 

Liam Byrne is a Trader and Analyst at MHC Digital Group focused on assisting the portfolio manager with funds management and the identification of position entries and exits.

 

Prior to joining MHC Digital Group, Liam spent more than 4 years at Lendlease most recently within the building/engineering division. Liam’s well rounded knowledge and history in project management allows for analytical and in-depth analysis with a key focus on risk mitigation and early detection of problems. Further, Liam brings broad-based experience derived from time as an early investor in cryptocurrency including positions in Solana, LINK and Ethereum.

 

Liam holds a degree in Construction Management and Property from UNSW and was awarded the DUX of his cohort, obtaining the highest weighted average mark of all students.

May 2023
Download PDF

To read our latest Fund Factsheet, please click on the below document.

To read our latest Investor Report, please click on the below document.

Click here to view our latest News.

•    By clicking the enquire button on the card view 


  
Or 

•    By selecting “Receive Info” when viewing the listing 


  
We will respond using your preferred communication method (i.e., email or phone).

Want More Information?

Phone
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
By submitting this form, you agree to our Terms and Conditions

Statutory Statement

This offer of scheme interests is available to wholesale clients only. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.

General Disclaimer

IMPORTANT STATEMENT ABOUT YOUR USE OF THIS SITE

Information on this site is intended for Australian users only.

This site is operated by Investment Markets (Aust) Pty Ltd. (ACN 634 057 248) (IMA, we, us and our), the holder of Australian Financial Services Licence (AFSL) no. 527875. The content is provided solely for information purposes, is not a recommendation or an offer to buy or sell a security, and is not warranted to be correct, complete or accurate. To the extent permitted by law, neither IMA, its affiliates, nor the content providers (such as the issuers of securities who appear on the site) are responsible for any investment decisions, damages or losses resulting from, or related to, the content, data and analyses or their use. The investment products on this site and any statements made about them by their issuers are not vetted, verified or researched by IMA. The presence of an investment product on this site should not be interpreted as an implied endorsement of it by IMA. Certain content provided may constitute a summary or extract of another document such as a Product Disclosure Statement. To the extent any content is general advice, it has been prepared by IMA. Any general advice has been provided without reference to your investment objectives, financial situations or needs. For more information refer to our Financial Services Guide. To obtain advice tailored to your situation, contact a financial advisor. You should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement (or other offer document) before making any decision to invest. Past performance does not necessarily indicate an investment product’s future performance. The content is current as at date of initial publication and may not be current as at your date of viewing. For a more complete understanding of all the terms and conditions of your use of this site click here.

Subscribe to our newsletter

Elevate your investment game with our exclusive weekly newsletter, curated for astute investors like you. Dive into deep market insights and uncover a purposely broad range of unfiltered opportunities. Join a community that thrives on informed choices. Don't just follow the market—lead it.