ARK launches active crypto funds for Eaglebrook TAMP
Crypto SMA firm Eaglebrook Advisors announced on Monday that it has added two digital asset strategies from Cathie Wood’s ARK Invest to its turnkey asset management program (Tamp).
The ARK Cryptocurrency Strategy will feature traditional “coins” like bitcoin and ethereum, while the ARK Cryptoasset Strategy will feature Ark’s “best ideas, just a long time, outside of cryptocurrencies,” Eaglebrook CEO Christopher King told Citywire. “Think about layer one and layer two protocols, infrastructure, DeFi, gaming and things like that.”
The SMAs are actively managed by ARK’s investment team and will have a minimum investment of $50,000. They will be available on Eaglebrook’s platform on October 17th.
“Advisors can differentiate themselves and add to a client’s diversification by adding this new asset class to their portfolios. Our partnership combines Eaglebrook’s best-in-class technology-driven investment platform with ARK’s established experience in digital assets, says Wood (pictured).
Eaglebrook, which previously offered its own flagship crypto SMA to RIAs, last month pivoted to a Tamp model where its platform provides access to digital asset portfolios offered by third-party asset managers. The first external SMAs on the platform came last month from Franklin Templeton, which made an undisclosed investment in Eaglebrook earlier this year. The firm is also backed by prominent RIA industry figures, including Marty Bicknell, Ric Edelman and Mark Casady, as well as a number of venture capital firms. King said Wood and ARK are not investors in Eaglebrook.
ARK Invest is no stranger to digital assets. The firm was the first major public fund manager to add bitcoin exposure to one of its ETFs, buying shares in the publicly traded Grayscale Bitcoin Investment Trust back in 2015.
“We are very excited to be working with Cathie Wood and their investment team on this,” said King. “We will collaborate on marketing and distribution for these two strategies, and we envision a future where they will add more strategies, but probably not until 2023.”
Wood has fared rather poorly throughout this year’s market downturn, particularly due to issues in the high-growth technology sector. Her flagship ARK Innovation ETF is down more than 61% so far this year. Some advisers have blown out her predictions — including her $1 million price call for bitcoin earlier this year — and have criticized the top-of-the-market management fees and expense ratios demanded by her funds, including the recently launched ARK Venture interval fund.
King said he is not phased by the controversy surrounding Wood’s investment philosophy.
“We want to cover the entire market and offer products to companies across the risk spectrum. The RIAs that they work with are a little further out on the risk curve, he said. “More conservative RIAs may be more interested in the Franklin strategy.”
King hinted that Eaglebrook plans to add crypto SMAs from several major asset managers next year. For now, the firm will focus on marketing to drive asset inflows for the four existing strategies at Tamp.
Like Wood, the broader crypto market has stumbled this year. The total crypto market cap has fallen from $2.2tn at the start of 2022 to under $1tn today. Bitcoin is down nearly 60% since the start of the year and is now roughly flat from the start of 2021. The popular terra stablecoin and related token luna lost almost all of their value in a spectacular collapse, while experimental cryptobank Celsius Network filed for bankruptcy this summer after customers lost a combined $5 billion.
“Crypto’s price action over the past year suggests that the ecosystem is fundamentally stronger than investors in traditional asset management are willing to acknowledge,” stated ARK crypto analyst Yassine Elmandjra. “A lot of the speculative behavior has died down. We believe this is an attractive entry point for investors.
