- 2024-05-10
- News
JellyC and Trovio Merge to Target $3.9T Australian Pension Market
The merger of the encryption hedge fund management companies JellyC and Trovio Asset Management aims to attract institutional investors such as pension funds. This strategic move will make JellyC, headquartered in Australia, the major shareholder of the merged company. Michael Prendiville, co-founder of JellyC, revealed in an interview that the expansion of the company's scale will help attract large investors in the Asia-Pacific region, including Australia's superannuation funds.
Prendiville emphasized that scaling up is key to attracting capital allocation. The merged company plans to increase the total assets under management by 150% by mid-2026, with a target of AUD 250 million. Jon Deane, CEO of Trovio, stated that although Trovio will eventually sell its shares in the new company, there is currently no clear timetable.
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It is understood that Australia's pension industry, with a scale of up to AUD 3.9 trillion, has been cautious about investments related to digital assets so far. However, Prendiville expects that this trend will change in the coming years as Australia's cryptocurrency regulation strengthens.
It is worth mentioning that with the clarification of the regulatory environment and the launch of exchange-traded funds (ETFs) in the United States and Asia, more investors are being attracted into the cryptocurrency market.
A new survey shows that among hedge funds trading in traditional markets, 47% hold digital assets, a proportion higher than 29% in 2023 and 37% in 2022. Among the funds that have invested, 67% plan to maintain the current level of cryptocurrency capital, while the rest plan to increase their investment before the end of 2024.
The report also points out that the operational strategies of hedge funds in the cryptocurrency market are becoming more complex. In 2024, 58% of funds traded derivatives, a proportion higher than 38% in 2023, while the proportion of funds trading in the spot market decreased to 25% this year after reaching a peak of 69% last year.
Nevertheless, some hedge fund managers remain on the sidelines. The survey shows that 76% of fund managers who have not invested in this asset class indicate that they are unlikely to change their minds in the next three years, higher than 54% in 2023. The main reason is that digital assets are excluded from their investment authorization. In addition, two-thirds of traditional hedge funds do not plan to include Bitcoin ETFs in their current digital asset strategy.
The survey involved 100 hedge funds, 42% of which invest in traditional assets, and the rest focus on cryptocurrencies. The survey was conducted in the second quarter when the price of Bitcoin had declined from its historical high in March.
Despite the high volatility of the cryptocurrency market, which provides profitable trading opportunities for funds willing to take risks, how to deploy a large amount of capital in a relatively small market remains a challenge.
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