• A&G revealed that CACEIS, the asset servicing banking group of Crédit Agricole and Santander, will serve as the depositary for the fund.
• A&G has selected CACEIS Bank, the asset servicing division of Crédit Agricole, to serve as the fund’s depositary, and PwC will undertake the auditor role.

A&G, a banking institution headquartered in Spain and specializing in private banking, has introduced the inaugural cryptocurrency fund under Spanish law. With €12.4 billion ($14 billion) in assets under management by the conclusion of 2022, the company disclosed the launch of a hedge fund that will be available exclusively to professional investors. 

According to a statement issued on Monday, A&G revealed that CACEIS, the asset servicing banking group of Crédit Agricole and Santander, will serve as the depositary for the fund. At the same time, PwC will handle its auditing responsibilities.

The fund’s managers will have full discretion to distribute the fund’s assets as they see appropriate, maintaining a minimum of 70% exposure to physical cryptocurrencies at all times.

Román González Torres and Rubén Ayuso, who have previous experience managing other funds at A&G, will be responsible for overseeing the fund. Torres stated that the fund will primarily concentrate on major cryptocurrencies in terms of market capitalization and liquidity. A&G completed the fund registration with Spain’s financial regulatory authority on July 21 and anticipates launching it by the end of September this year.

Torres further stated that if the market reaches a state of exuberance, the fund may hold up to 30% of its assets in cash. Nevertheless, the fund will always maintain its core investment in cryptocurrencies, establishing it as a 100% crypto fund.

Unlike passively-managed cryptocurrency funds such as Grayscale’s Digital Large Cap Fund (GDLC) and Bitwise’s 10 Crypto Index Fund (BITW), which mirror specific crypto indexes and have seen gains of 8.6% and 26.1%, respectively, in the last year, A&G’s fund will take a different approach.

Rather than tracking predefined indexes, A&G’s fund will be actively managed by its managers. They will decide on crypto exposure based on prevailing market conditions, liquidity, and insights from data providers like Glassnode. Additionally, updates on products and the level of market adoption will also influence their investment decisions.

It’s worth noting that the A&G fund will be an exchange-traded product, offering tax benefits compared to direct investments in cryptocurrencies, especially when swaps are involved, as mentioned by Torres.

According to Torres, the bank has devoted over two years to preparing for the fund’s launch, and the implementation of MiCA regulations has been instrumental in facilitating this process.  A&G has selected CACEIS Bank, the asset servicing division of Crédit Agricole, to serve as the fund’s depositary, and PwC will undertake the auditor role.

Torres remarked,

“The volatility will be high. However, we anticipate outperforming the overall crypto market in the long term.”

Diego Fernandez Elices, the Chief Investment Officer at A&G, expressed his views in a statement.”We consider it an optimal solution for any European professional investor who wants to approach the world of cryptocurrencies without forgetting that it is a very high-risk fund,”

In 2022, the Bank of Spain initiated the issuance of licenses to companies like Bit2Me, Bitstamp, BVNK, Crypto.com, and Ripio, allowing them to offer services related to the exchange of virtual currency for fiat currency and the safekeeping of digital wallets.

At a later date, specifically in December 2022, the Spanish central bank announced its intentions to launch a wholesale central bank digital currency (CBDC) project. As part of this endeavor, the bank invited financial institutions and technology providers to submit proposals for the initiative’s implementation.