One Year!
Dear Friends and Colleagues,
One year! It’s been a year since we launched our Liquid Digital Assets Fund back on June 1, 2022, and oh what a year it has been!
It has been an incredibly eventful time for this space since we began putting Firinne Capital together in late 2021: a market downturn in early 2022, followed by the collapse of Terra/Luna and Three Arrows Capital in mid-2022, and then the unbelievable tale of hubris and dysfunction that was FTX. (We’ll note that Three Arrows and FTX were not crypto problems – they were TradFi problems, of the type we seem to be doomed to repeat as humans!)
Though the seas were stormy, we are happy to be able to say that we met our objectives that we set out to achieve, delivering to our investors a return ahead of our benchmark, net of fees. As a bonus, we also outperformed BTC, which seems to be an implicit benchmark for many.
As experienced practitioners, we know this won’t be the case for every time period, so we will not rest, and we will maintain humility. We will continue to productively challenge ourselves to understand the digital assets investment space, the nature and details of the technologies underlying the tokens, the behaviors of other participants in the space, the macro and regulatory environment from which no one can escape, and what risks we can manage. We have to be able to do deep dives yet remain nimble. We have to remain alert to small changes, yet not overreact. It’s not easy, but we are up for the challenge!
Our mission was to bring an institutional approach to asset management in the digital assets space – create a team with experience in institutional investing as well as digital assets, think deliberately about alpha and beta, be thoughtful about portfolio construction, and leverage our experience with data science and quantitative investing to inform a fundamental and thematic approach to investing. As future-forward and wide-eyed as this space is, we think our results show that there is still a place for good old-fashioned risk management, portfolio construction, counterparty risk assessment, and skepticism. With a final helping of keeping costs down via low turnover and aligned fees, we strongly believe our offering holds merit in a crowded space.
We’re grateful to have reached this milestone and would like to extend a sincere thanks to everyone who has supported us along the way. We are working with wonderful counterparties and service providers, and we’ve also made so many fantastic connections with brilliant people working in the digital assets space.
As always, we look forward to what the future will bring!
Ruairi Hanafin
Chief Investment Officer