US cryptofund targets PE, real estate

Swarm Fund is targeting investment in five alternative asset classes over the next six months.

Swarm Fund, a US-based cryptocurrency fund, is to invest in five alternative asset classes over the next six months.

The vehicle, managed by a team of finance entrepreneurs, opened its token offering with $2.25 million seed funding last week and will close on September 22. A target has not been disclosed.

The fund has collaborated with four existing partner vehicles, offering investment in US distressed real estate, US solar energy market products, software service companies, the mortgage lending market and high-value artwork. There is also a hedge fund strategy in development.

The partnering fiat-denominated funds will be offered co-investment opportunities in the Swarm Fund’s investments.

Swarm’s managers have tried to integrate a recognizable regulatory framework to improve investor confidence, said co-founder Philipp Pieper.

“In working on how to deploy cryptocurrency into real assets, we’ve automated the investment process by setting up seven special purpose vehicles, establishing corporate governance around those vehicles, and creating a flexible fund that can adapt to evolving rules regarding blockchain and cryptocurrency enterprises,” said Pieper.

The partner funds, from which capital will be deployed, will be licensed as securities, where applicable, and will have fund managers responsible for them, Pieper added.

Investors can exchange digital currency for the fund’s ‘swarm tokens’ to commit to the vehicle. The fund then exchanges the tokens for a fiat currency to make real asset investments.

The fund, which is hosted on a blockchain platform, has two token types: a ‘utility’ token, which gives investors access to the platform and allows them to participate, as members, in its overall governance and a sub-token, which will allow members to invest in the actual funds on the platform, management said.

It is the second cryptocurrency-denominated fundraise to be announced in the last two weeks. Netherlands-based Finles Capital Management is seeking to raise one-fifth of its €500 million target via FundCoins, its own cryptocurrency, as reported by pfm.