ALSET: Bitten by crypto bug, partners Singapore firm Novum Alpha

The cryptocurrency bug has bitten Alset International, as it partners Singapore-based Novum Alpha to launch a maiden cryptocurrency exchange-traded product (ETP).  Highlights: 

Singapore Exchange-listed Alset yesterday said its wholly-owned capital markets investment arm, SeD Capital Pte Ltd, has entered into a joint venture agreement with digital asset management firm Novum Alpha Pte Ltd.

SeDCapital will own 50.0% of the issued and paid-up capital in the joint venture company, Credas Capital Pte Ltd, with the remaining held by Novum Alpha.

Credas intends to develop and launch its maiden digital assets-based ETP in the fourth quarter of 2021 on the SIX Swiss Exchange.

Leveraging on sophisticated deep learning software, data science tools and algorithmic trading capabilities, Novum Alpha said its analytical and quantitative allocation approach has helped clients worldwide achieve consistent, uncorrelated returns from digital assets under all market conditions.

Novum Alpha will contribute its know-how, management expertise, intellectual property rights and undertake to act as a fund manager of the ETP.

Novum Alpha will also be responsible for managing the listing and maintenance of the ETP on the SIX Swiss Exchange.

In turn, tapping on its extensive investor network, SeDCapital will undertake to market the ETP to potential investors while satisfying the necessary reporting requirements and use its best endeavours to promote and develop Credas.

The launch, operations and expansion of Credas will initially be financed by a US$150,000 shareholder loan, of which 90.0% will be provided by SeDCapital and the remaining by Novum Alpha.

These initial shareholder loans are interest-free and will be repaid on a “first-in-first-out” basis (older loans to be repaid first) out of the operating profits of Credas.

Credas intends to launch algorithmically-managed, cryptocurrency tracker products that will provide investors broad-based exposure to an automatically rebalanced portfolio of liquid cryptocurrencies, through an actively-managed cryptocurrency ETP.

Credas will also pursue the listing of other cryptocurrency-focused ETPs in due course, including quantitative digital asset trading products that seek to generate returns from volatility inherent in the digital asset markets.

This joint venture deepens Alset’s position into the digital assets space, a nascent industry that has been gaining traction with investors globally due to its potential to generate supernormal profits.

Overall, the value of the cryptocurrency market rose more than two-fold over the last two months to more than US$2.0 trillion1 as of April 2021 as interest in digital currencies has risen dramatically and investors, both retail and institutional, continue to pile into the space.

Mr Chan Heng Fai (photo), Executive Chairman of Alset International Limited commented, “Today, we are delighted to announce our strategic partnership with Novum Alpha, a company that we believe harnesses deep know-how and capabilities to bring new, innovative and investor-friendly cryptocurrency ETPs to market. "Due to the growing investor interest this asset class has garnered in recent times, we are confident that our strategic decision in this venture will help us generate significant value for our shareholders.” Mr Patrick Tan, CEO & General Counsel of Novum Alpha Pte Ltd commented, “Novum Alpha is privileged to be working with Alset, a visionary and leader in generating value from a vast array of businesses, as the Group now applies its experience to digital assets. "As digital assets enjoy growing mainstream adoption and increasing institutional participation, Alset and Novum Alpha are well-positioned to ride this next wave of growth by making digital assets more accessible, while unlocking value for an entirely new investor class.”