Jacobi’s new CEO to oversee Europe’s first Bitcoin ETF, Future Crypto Funds

Jacobi Asset Management has appointed a new CEO with deep ETF experience as the firm is set to launch a first-of-its-kind product in Europe, with additional crypto funds in the works.

Former Goldman Sachs investment banker Jamie Khurshid has led London-based Jacobi since it launched in May 2021, and Martin Bednall will replace him as chief executive on August 1, the company revealed on Thursday. Khurshid will become chairman of the company, and current chairman Roy McGregor will remain as a director of the firm.

Bednall served as CEO of BlackRock from 2000 to 2013, according to his LinkedIn profile. There he was co-leader of the iShares product team with responsibility for the development and management of new exchange-traded products (ETP) in Europe, the Middle East and Africa.

Most recently, Bednall led FinEx Capital Management’s ETF business, including portfolio management, capital markets, operations and product development.

The Jacobi Bitcoin ETF, the first such product in Europe, is due to launch on Euronext Amsterdam next month with an annual management fee of 1.5%, and Bednall will help the firm expand its crypto fund slate.

Bednall called ETFs the “go-to structure” for investors, arguing that they are superior to the exchange-traded notes (ETNs) currently on the European market.

While ETNs are debt instruments that are typically secured by the underlying exposure, such as bitcoin, he told Blockworks, Jacobi’s ETF was approved by a regulator and holds bitcoin directly.

“You bring the digital exposures, but do it in a way that the investors are very comfortable with,” Bednall said. “If you put in the time and effort, you get a better product, and that’s what Jacobi has.”

Regulatory process and future products

Jacobi’s upcoming bitcoin ETF product had received regulatory approval from the Guernsey Financial Services Commission last October, but it took months for the firm to find a place to list it.

Christopher Jehan, head of fund architecture and former chairman of the Guernsey Investment & Funds Association, helped the bitcoin ETF meet regulatory standards. Several exchanges in the region “didn’t have the appetite” for ETFs, he told Blockworks.

“Being the first of a kind, it’s satisfying, but it’s always significantly more work and a lot more hand-holding than taking the well-traveled road,” Jehan added.

Jehan said he expects launching more crypto products to be a more “streamlined” process going forward. Executives noted that the company could seek to launch additional single-asset crypto funds, such as one that owns ether, as well as crypto basket products and funds that hold crypto alongside non-crypto assets, such as traditional commodities.

“Already there has been discussion about potential funds two, three, four and five,” Jehan said. “Have we got an absolute sense of direction yet? No.”

Bednall added that investors are expressing interest in yield products.

“We have to be very careful about that, as we know there have been problems in the market around stablecoins,” he noted. “So when we look at it, we have to design it so that there’s a lot of investor protection.”

Who will emerge as competitors?

Calling this a pivotal time for digital assets, Bednall noted that many interested institutional investors have been on the sidelines seeking the best way into the space.

“[This] is going to be the product that many of the institutional investors have been waiting for,” he explained. “It gives them the first taste, the first access and then builds the comfort around investing in digital assets.”

While Bednall expects smaller, nimble companies to launch similar crypto ETFs, he said BlackRock, for example – the world’s largest asset manager – is likely to be “many years away” from doing so.

BlackRock added the iShares Blockchain and Tech ETF (IBLC) to its megatrend product suite, but has declined to comment on whether it will seek to launch products containing cryptoassets directly.

“There are a lot of competing voices within those institutions where a lot of people will be wary, some people will be totally against it, and then you’ll have people who will do it,” Bednall said. “They are slow-moving organizations and the bureaucracy doesn’t allow them to get into something like this at this stage.”

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