Alan Howard’s Elwood Targets Big Investors for Digital Assets

(Bloomberg) -- Elwood Asset Management, owned by hedge-fund billionaire Alan Howard, plans a range of products to lure big institutional investors into digital assets.

The company said the new regulated products will cover the full spectrum of crypto-assets, Chief Executive Officer Bin Ren said in a phone interview. Elwood and Invesco Ltd. have already launched an exchange-traded fund tied to companies that are developing blockchain technology, the ledger tool first created to facilitate Bitcoin transactions.

Some institutional investors are looking at crypto investments, but most have steered clear because of an uncertain regulatory outlook and concerns over money laundering and market manipulation. Ren said that makes blockchain an easier sell right now, though Elwood also plans to develop investments tied to the trading of digital assets, and may eventually offer exposure to cryptocurrencies such as Bitcoin and Ethereum.

“The only way for institutions to get meaningful exposure to digital assets has been to buy Bitcoin, but many are reluctant or unable to buy Bitcoin -- and for good reason,’’ Ren said. “An ETF gives a highly liquid and regulated way to gain exposure. This is the right point to start.’’

The market for cryptocurrencies, which started a decade ago and is now valued at $130 billion, began with retail investors, but institutions have slowly taken an interest. A few, such as Yale University and two pension plans in Fairfax County, Virginia, have made investments in the asset class.

Howard, a co-founder of Brevan Howard Asset Management, made sizable personal investments in cryptocurrencies in 2017, people with knowledge of the matter said last year. He has no involvement in the day-to day-operation of Elwood, which isn’t part of Brevan Howard.

To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net, Patrick Henry, Paul Armstrong

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