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Blockchain & Cryptocurrency
March 2019 www.intellinews.com I Page 22
set up a fund in just by decision of the directors. That saves 3-6 months in the set up process.
The break-even point in the AIFMD is about €8- 10mn which is more than Caymans but it is still less than it costs to set up a regular fund. If you were going to do your own fund in Luxembourg then you need assets under management (AUM) four times higher than our breakeven point; you’d need at least €30mn or more to start a new fund.
The third platform is completely unregulated and there are some limitations like we can’t make a fund that is bigger than €100mn, but this is the fastest and easiest way to set up a Luxembourg- based fund. On that we have created a crypto ETP, exchange trade product, that will track a crypto index we have created in collaboration with MVIS.
BA: You are setting up a platform for people to get into the fund business with a much lower bar. Instead of €30mn you only need €2mn which is democratising the fund business. You make it possible for a much wider range of people to
get into this business.
GY: That is the point. We see ourselves as a niche player. We offer small and interesting portfolio managers opportunity to start up. We give them a chance to show themselves. And for investors they have a chance to buy into these juicy stories rather than buy big funds that everyone already knows.
When we go to the process of setting up a fund on our platform we don’t want to go into setting up
a fund that will not be a success. First we do the math, we understand the strategy, if it is viable. We interview the portfolio manager, we understand if he is serious and how it all works, if it was a systematic return or just a one of exercise. And then after we get enough confidence into these guys we ask them to put some real cash with the broker for about half of a year so we can see the strategy operating on a real account. We ask them to trade using managed accounts just to prove their performance and for us it is the only way to see if earnings are systematic. If in real life manager shows that one month strategy
was up 20% and the other month it was -30% it doesn’t really fly for us. It’s something like he was just lucky that month. Only then we go to the next step of setting up a fund. 80% of smart guys just get smashed by the open market. They don’t survive this half a year exercise.
So it’s like an evolution. You put people into the wild. And those who survive grow stronger.
Yes, exactly. Just because we don’t want to spent time and money on setting up a fund for somebody who will not perform.
ITI Funds democratising the asset management business
Since the fall of the Soviet Union Russia has embraced capitalism and the one thing it is really good at is managing money. World Bank studies have found Russia financial system is on a par with western peers and the Russian Central Bank’s clean up of the sector is in its end game.
At the same time Russian’s wholesale embrace of new technologies are pioneering fintech inno- vations. There are things that you can do with your bank and telephone in Moscow that you can’t do in the west.
ITI Funds has set up five platforms – three in Luxembourg and two in the Cayman Islands – that dramatically reduce the cost of entry to the fund management business. The low cost will democratise the asset management business and turn the pyramid on its head.
bne IntelliNews editor-in-chief Ben Aris talks to the CEO of ITI Funds Gleb
Yakovlev about his business
and the services that the
company offers.
Gleb Yakovlev, CEO of ITI Funds
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