Sygnum, Managing $4.5 Billion, Restructures Crypto Fund for Institutional Push

The Swiss-based digital asset banking group Sygnum has successfully converted its Yield Core crypto fund into a Luxembourg Reserved Alternative Investment Fund (RAIF) structure, moving towards institutional-grade crypto investment offerings. The fund, which manages nearly $30 million in assets, focuses on yield-generating strategies in cryptocurrency markets.

Sygnum Converts $30 Million Crypto Fund to Luxembourg RAIF Structure

The transition, approved by 99% of existing investors, enhances the fund's governance framework and eliminates counterparty risk through direct asset ownership. The fund has demonstrated positive performance so far with a Sharpe ratio of 2.7 over two years.

“This move not only increases investor protection and convenience but also strengthens our international distribution,” said Markus Hämmerli, Head of Liquid Strategies at Sygnum. “Yield Core’s transition into the Luxembourg RAIF structure is an important step in our ongoing efforts to provide, amongst others, best-in-class crypto yield solutions to our growing investor base.”

The fund employs market-neutral strategies including lending, funding arbitrage, and liquidity provision in the crypto space. Under the new structure, it can expand into key markets such as Singapore, targeting professional and institutional investors seeking diversified yield sources.

The restructuring addresses the growing demand for regulated crypto investment vehicles, particularly from institutional investors looking for alternatives to traditional fixed-income products in the current market environment. Investors can access the fund through Sygnum Bank or other custodial banks, with plans for expanded distribution in select jurisdictions.

The growing interest is confirmed by 2024’s first-half report, in which the company disclosed an increase in assets under management to $4.5 billion and a 500% rise in derivatives trading volumes.

“As the authorized AIFM, we are proud to support Sygnum in providing investors with a secure and regulated pathway into the virtual asset class,” said Stephan Edelmann, Managing Director of Hauck & Aufhäuser Innovative Capital. “We have not only extended Luxembourg's well-established AIF structures to this innovative field, but we have also created a unique opportunity for investors to access this emerging asset class with confidence and compliance.”

EU Expansion under MiCA

Last month, the Zurich- and Singapore-based digital assets banking group announced that it had secured a cryptocurrency license in Liechtenstein. This license was awarded to its local subsidiary, enabling it to offer regulated digital asset services, including brokerage, custody, and banking.

The services will operate under Liechtenstein’s Token and Trusted Technology Service Providers Act. With this license, Sygnum is also positioned to seek a Crypto-Asset Service Provider (CASP) license under the European Union's Markets in Crypto-Assets Regulation (MiCA) once Liechtenstein adopts the regulation, expected in the first quarter of 2025. The CASP license would allow Sygnum to expand its services throughout the European Union.

MiCA, a regulatory framework tailored to the cryptocurrency sector, allows licensed companies in one country to operate across all 27 EU member states and European Economic Area countries, including Liechtenstein. Switzerland, where Sygnum is headquartered, is outside this regulatory jurisdiction.