The crypto hedge fund is a new phenomenon, created by entrepreneurial investment managers looking to take advantage of the huge gains that cryptocurrencies have experienced over the last three years. The BVI has one of the largest cryptocurrency markets in the world, featuring in the top five geographical markets by USD denominated trade volume, as indicated by CoinShares Research CryptoReport. The BVI incubator fund incorporates a ‘20- 20-20 criteria’ – it allows a maximum of 20 sophisticated investors, each of whom must make a minimum initial investment of USD20,000 but the fund must not exceed a cap of USD20 million in terms of the aggregate value of its investments. This structure was devised in 2015 before anyone had even heard of a bitcoin, but fortuitously it provided the perfect set-up for light-touch, short-term crypto vehicles. Not long ago, they introduced a new regime for Incubator Funds – often known as 20-20-20 funds. This coupled with its welcome 2020 “white-listing” on financial crime by the European Union bodes well for the continued business growth trajectory. In this article, CollasCrill's Christian Hidalgo (pictured, above left) and Simon Gray of BVI Finance (pictured, above right) revisit the incubator fund – ever-popular with hedge fund managers and family offices – focusing on the structure's new popularity among crypto and digital investors.Įver been told you have 20-20 vision – well what about 20-20-20 foresight? Innovation is not new to the British Virgin Islands (BVI) – in fact they are becoming rather used to it – take their Private Investment Fund regime launched in 2020 which brought a new regulatory regime for close-ended funds.
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