A new company backed by very wealthy families has just raised $8.8 million in pre-Series A round funding to launch an investment platform designed to help family offices manage crypto portfolios.
Yang He, co-founder and CEO of the Hong Kong-based startup and a former M&A investment banker, says Aspen connects to digital-asset exchanges, brokers and fund managers on behalf of clients, so investors only need a single integration and a single dashboard for their exposures.
Aspen will manage private keys, KYC and due diligence, provide aggregated research, execution, and reporting. It does not plan to offer advice.
“It’s a pain point with family-office CFOs and COOs to open a Binance corporate account,” He said, referring to the crypto exchange. “I have to track everything over Excel spreadsheets.”
All in the family
He says the inclusion of well-known families in the funding round validates the business idea.
Those include a Rothschild (Jacob, via his RIT Capital Partners), Emil Woods of Liberty City Ventures in New York (and co-founder of Paxos, a digital-asset custodian and brokerage), and a Bond (Jonathan, son of Sir John R.H. Bond, former chairman of HSBC).
Of these, Jonathan Bond is the most hands-on with the startup. He runs TT Bond Partners in Hong Kong, a boutique advisory and investment firm. TTB helped incubate Aspen.
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So did Everest Venture Group, led by CEO Allen Ng, and where He is also a partner. EVG is a consortium backed by several Asian families, such as Empire Group Holdings, the family office of Walter Kwok of Sun Hung Kai. It was was set up in 2018 to ride the crypto boom in initial coin offerings and now invests in related startups. One of these is called Kikitrade, a retail-facing investment platform for crypto; which makes Aspen a sort of institutional cousin.
The UBS of crypto?
Yang He likens Aspen’s service to something that a UBS or Morgan Stanley would do in the traditional wealth-management world. If Aspen meets expectations, he says a possible exit would be to sell it to a global private bank to become their solution for crypto.
It’s possible that the global giants will prefer to build their own managed-account services. “But the institutional players are slow,” He said. “It’s both their competitive advantage and disadvantage that they are focused on compliance. Our business will move quickly.”
For now, the goal is to partner with private banks and other third party “channels” that can help bring Aspen’s clientele new products. He expects around 80 percent of the firm’[s growth to come from partners.
Among the entities that will be connecting APIs to Aspen are the exchange FTX, prime broker Celsius Network, and digital asset custodian Hex Trust.
“We help with execution,” He said. “We can help you subscribe to a fund, or a DeFi yield-generating product, or quant strategies. We’ll have relationship managers to help you execute, and your CFO will have a portal to manage everything.”
The startup won’t be recommending single cryptocurrencies nor single products such as a Grayscale-type trust. Instead it wants to focus on diversified portfolios, including coins, stablecoin-based yields (such as from Tehter, aka USDT), out to very aggressive DeFi staking protocols that can generate annualized returns of 25 percent or more.
It will run due diligence on digital-asset fund managers, including both market-neutral quants and more aggressive directional strategies.
The fee details are still being worked out but will involve two tiers, one an annual management fee based on client assets under management, and the other transaction fees, such as a spread on purchasing yield products or carried interest on fund introductions.
As clients are all professional investors, they assume the counterparty and investment risks, but Aspen will provide them with due diligence and manage the keys, with governance protocols so the owners can transact upon demand.
Aspen’s platform isn’t live yet. He expects that to happen around October. The proceeds from the fund raise will go to further developing the platform as well as opening offices in London and Singapore.
RIT Capital and Liberty City Ventures are the lead investors in the pre-A round. Other investors include Cherubic Ventures, Token Bay Capital, Somerley Capital, and Chatchaval and Chaval Jiaravanon.