First Bitcoin Mutual Fund in Europe Launches

Announcements, Investing | November 23, 2017 By:

Paris-based firm Tobam has launched an unregulated alternative fund in France called Tobam Bitcoin Fund, allowing institutional investors to gain exposure to the cryptocurrency. The new bitcoin fund will be available to investors on a private-placement basis.

Formed in 2005, Tobam is an asset management company with a mission to provide rational and professional solutions to long term investors in the context of efficient markets. The company claims that it has about $8.8 billlion in assets under management. Tobam is regulated by the Autorité des Marchés Financiers (AMF), France’s stock market regulator, since June 2006 and is a US Securities and Exchange Commission (SEC) registered investment adviser. The company is also registered in Canada and South Korea.

The Tobam Bitcoin Fund was classified as an unregulated alternative investment fund since it’s not traded on an exchange and does not fall under the European Union’s mutual fund structure known as UCITS (Undertakings for Collective Investment in Transferable Securities). The fund, however, has daily liquidity based on market closing prices.

Yves Choueifaty, President of Tobam, said they have conducted research from a technical, financial, economic, and regulatory point of view on bitcoin for a year prior to launching this fund. The company’s research and development team includes computer specialists, engineers, researchers and risk management experts.

Tobam stated that that while the cryptocurrency is prone to significant risks, it also provides diversification benefits. The company is looking to leverage its in-house computing capabilities to implement fully integrated risk control and straight-through-processing investment systems.

“Bitcoin being a highly diversifying asset, this launch is also an expression of our commitment to diversification in all its forms,” said Choueifaty. “Once again TOBAM is ahead of the curve and, in order to remain so, we will continue to reinvest a significant part of our growth into research and innovation for the best interest of our clients.”

Christophe Roehri, Tobam’s Business Development Head, said direct investment in bitcoin can be operationally challenging, from dealing with the choice of the platform, to maintaining the proper security measures in terms of custody and to managing the changes made to the protocol – hard forks.

“Our goal is to take control of these operational challenges in order to facilitate access for qualified investors willing to gain exposure to bitcoin,” said Roehri. “All of that under the format of a fund.”