Wilshire Phoenix Teams With Coinbase Custody On New Crypto-Focused Fund

News | November 1, 2018 By:

New York-based investment firm Wilshire Phoenix has partnered with Coinbase Custody Trust to launch a new crypto-focused fund, which will initially have a capital pool of $500 million.

Wilshire Phoenix is an investment management and advisory firm focused on the formation of transparent and practical funds encompassing both traditional and alternative assets. It also provides asset management and advisory services for numerous products and asset-classes, including securitization transactions, fixed-income, global equities, alternative assets and derivative products.

Coinbase Custody Trust is a limited purpose trust company owned by crypto exchange Coinbase. Coinbase Custody Trust has been approved by the New York State Department of Financial Services (NYDFS) as a qualified custodian firm for cryptocurrencies. It services a range of customers including institutions, hedge funds, initial coin offerings (ICO) and cryptocurrency exchanges.

The joint venture between Wilshire Phoenix and Coinbase Custody will provide exposure to bitcoin. The fund is not intended to replicate a direct investment in bitcoin, but it will seek to provide investors and financial institutions with the ability to gain exposure to bitcoin while mitigating some of the risks involved from sudden price movements of bitcoin.

Wilshire noted that investors together with financial institutions may find it difficult to purchase and hold bitcoin due to pricing models around Generally Accepted Accounting Principles (U.S GAAP). The company said that its patent-pending system may help to solve this “important issue.”

“The fund will not use derivatives or any form of leverage to achieve its objective,” Wilshire said. “This will limit counterparty exposure and the often unnecessary additional fees that are normally associated with these types of financial products or methods.”

Bill Herrmann, Founder and CEO of Wilshire Phoenix, said that Coinbase Custody will provide them with a “best in class platform” on which to securely store digital assets.

Sam McIngvale, General Manager of Coinbase Custody Trust, said that as a regulated qualified custodian and fiduciary, Coinbase Custody will not only offer Wilshire Phoenix clients’ secure storage for digital assets, but also the ability to perform GAAP-compliant audits whenever the need arises.