Diginex Fund of Funds Generates 35% Return

Digital asset financial services provider Diginex’s fund of cryptocurrency hedge funds, The Bletchley Park Multi Strategy Fund (BPMSF), generated a net return of 35% for the last year as of January 31, according to the company. 

“The crypto world is still a jungle for most people to try and navigate. Now that it’s become mainstream to the extent that it’s on the front page of websites and newspapers all the time, more and more people are thinking ‘how do I get some exposure,’” said Shane Edwards, head of investment products at Diginex. “We’ve built a fund so that people can get exciting exposure to what we think are the most exciting managers pursuing all different types of strategies.” 

BPMSF launched in November 2019 and primarily invests in alpha strategies. With limited exposure to underlying digital assets, the fund underperformed bitcoin’s more than 300% 2020 return, but was also able to outperform in months when bitcoin dipped negative. 

“Everyone’s pretty familiar with the fact that Bitcoin can go up a lot, but what goes up can also come down,” said Edwards. “Even if you like the long run trajectory of bitcoin, if you’re massively bullish about what it can do in the next three, four, five years, obviously, in the meantime, it can move around a bit.” 

BPMSF is diversified across a range of trading strategies, including arbitrage and relative value. The variety helps the fund to mitigate risk associated with any one digital asset and maximize returns, Edwards said. 

“We’d like to be able to deliver positive returns over a period of time, irrespective of whether underlying digital assets like bitcoin or ethereum are up or down,” said Edwards. “We do that by making sure the fund has exposure to a number of different managers and a huge range of different strategies across those managers.”

Diginex became the first publicly traded cryptocurrency exchange in October 2020. The firm began trading on Nasdaq under the ticker EQOS through a backdoor listing as opposed to a traditional initial public offering. 

“It was a huge differentiator for our business. Other digital asset companies or crypto companies might avoid regulations, and we’ve done the opposite,” said Edwards. “We embrace regulations, and I think that’s key to appealing to a broad institutional client base, so they know you’ve got a sustainable business and that you’re safe to do business with.”