Traditional hedge funds leaning into crypto, says report

Almost half (47%) of traditional hedge fund managers surveyed for a new report are already invested or looking at investing in crypto.

Managers representing $180billion of AuM were surveyed by PwC, Elwood Asset Management and AIMA for the third annual global Crypto Hedge Fund report.

Around a fifth of those traditional hedge funds surveyed are currently investing in digital assets (21%); the average percentage of their total hedge fund AUM invested in digital assets is 3%. The vast majority (86%) of those traditional hedge funds currently investing in digital assets intend to deploy more capital into the asset class by the end of 2021, revealed the research.

Around a quarter of traditional hedge funds who are not yet investing in digital assets confirmed that they are in late-stage planning to invest this year or looking to invest (26%).

“As a growing asset class, there has been significant growth in traditional hedge funds investing in digital assets, with the majority of those that have already invested intending to deploy more capital,” said Jack Inglis, CEO of AIMA.

“Diversification and exposure to a new value creation ecosystem are cited as drivers for investing in digital assets. This is unsurprising given that hedge funds tend to be early adopters, at the forefront of innovation whilst remaining committed to achieving the best performance possible. Further education and regulation could lead to the acceleration of further growth and interest from traditional hedge funds.”

Report: Investors’ optimism for small & micro caps ‘not waning’

More than three quarters of professional investors are backing small and micro caps over mid and large caps over the next six months, according to a new report.

Investment holding company MBH Corporation surveyed wealth managers, fund managers and other institutional investors in the UK collectively managing $140bn in assets. The findings revealed that 76% think small and micro caps will continue to outperform mid and large caps over the next half year. 

Of the investors surveyed, 84% believe micro and small caps are currently an attractive investment opportunity, and over the next 12 months 76% expect to increase their exposure to these sectors.  Some 11% anticipate they will ‘significantly’ increase their allocation, and no respondents predicted investors will reduce their level of investment in micro and small caps.     

“Smaller companies often benefit the most from hopes of an economic recovery and are the main winners when this starts,” said Callum Laing, CEO of MBH Corporation. “This, and the fact they can also be more nimble than larger companies during difficult times and adapt better, helps explain why micro and small caps are currently so popular with investors.  Our research shows this optimism is not waning.”

GDPR: Three years on

Compliance with the GDPR legislation has become less about avoiding fines, and more a marker of an organisation investing in ‘accurate, up-to-date and secure data processes’, one expert has said on the three-year anniversary of the regulation’s implementation.

“High profile organisations have shown us that there aren’t simply financial repercussions, but reputational consequences to failing to adhere to GDPR,” said Nicola Howell, Managing Attorney, Legal at Dun & Bradstreet UKI and Europe. “As consumers put an increasing reliance on data privacy and how their personal information is used, businesses that invest in their own data approach by ensuring they have access to clean data will come out on top in the end.”

She added that as businesses head into a ‘data-driven future’, organisations will need to stay updated with the latest policies. “We are beginning to see companies invest in a clean data approach,” she added. “What comes next remains to be seen; the ePrivacy legislation was always seen as the next logical step after GDPR but has been repeatedly delayed. And then you have the rapid adoption of technology and more specifically AI, which has flourished during Covid-19.

“How do organisations ensure they adhere to regulations such as GDPR and ePrivacy if a robot processes streams of data for them? What if the AI learns to process the information quicker but it doesn’t meet regulation? These are the very complex questions that organisations need to be looking into.”