The investment fund Ark 36 is seeing the light of day, and now investors can buy into a fund that actively manages cryptocurrency.
The people behind the fund are Ulrik Lykke, Mikkel Mørch, Jacob Skaaning and Marck Bertelsen. It is registered in Cyprus and it is regulated as an alternative investment fund.
The portfolio's main asset will be the biggest asset in this market – bitcoin.
"We're fundamentally convinced these assets will increase over time, so we're investing long-term. But the markets are also known for being relatively volatile, so we're also doing what we can to protect the downside by investing in the short term," Ark36 Executive Director and co-founder Ulrik Lykke says.
He says the fund aims to hit EUR 100m in assets under management within two years. To start with, the amount is somewhat smaller, as the fund has been promised EUR 6m so far.
The money will come from professional investors in the "friends and family" category – that is the broad network. The minimal investment is EUR 120,000.
"We think it's an interesting product, if you have the investment portfolio, but we're not trying to reach everyone," Lykke says.
Nerves of steel
The first time Lykke invested in bitcoin was in 2011, and in autumn 2017, he and Jacob Skaaning established an investment firm in cryptocurrency. In the following months, the value of bitcoins skyrocketed, after which it collapsed.
Lykke says that even including this time period, he and his partner have outperformed the relative increased value of bitcoins.
"Naturally, the high returns come with a risk, and we're not trying to hide this. It takes nerves of steel and you need to know what you're doing," Lykke says.
He does not wish to disclose his expectations for the prospective return.
"But we offer a product with an asymmetrical risk to reward, which is probably better than what you'll find on the market," Lykke says.
Cyprus far ahead
Skaaning and Lykke tried establishing themselves in Denmark through their first investment company, but they needed to take a stand on cryptocurrency investments, he says. So after some time and a "massive lawyer bill" they decided to look outside of Denmark, which ultimately brought them to Cyprus.
"It has a solid tradition for fund companies, a strong industry with many services and good opportunities for establishing a fund structure. And it's one of the countries that has leaned towards embracing bitcoin and cryptocurrency," Lykke says.
Aside from this, Cyprus is known for its protectiveness of company owners' identities. Cryptocurrency is also well-known for its secretiveness. This, however, has not influenced the choice, according to Lykke.
"We've thoroughly researched many countries, and when it comes to regulations, Cyprus is just as strict as Denmark. Cyprus is part of EU and is following the same framework as we are," he says.
"Most people seeking out investments in cryptocurrency are familiar with this being a fairly new asset class, which has not yet been embraced by all authorities. They're not sure how to look at it," Lykke says, pointing towards there being some insecurity regarding whether cryptocurrency should be considered equity, currency or commodity, for example, in the portfolio.
English Translation: Nielsine Nielsen
(This article was provided by our sister media, FinansWatch Denmark)