M.H. Carnegie & Co forms strategic partnership with Australia’s first cryptoasset fund manager
Alternative asset manager M.H. Carnegie & Co. today announced a strategic partnership with Blockchain Assets Pty Ltd, a boutique investment firm that invests in businesses that use blockchain technology, to strengthen its foothold in the crypto industry.
Managed by Perth-based investor Ian Love, Blockchain Assets’ flagship fund Blockchain Early Opportunities Fund (The Fund) is Australia’s first cryptoasset fund that invests in a broad range of cryptocurrencies, crypto commodities, crypto securities, Non-Fungible Tokens (NFTs) and tokenised assets.
The Fund’s impressive line-up of high-profile investors includes the Bunning Family, James McClements of Resource Capital Funds and Michael Manford of Canaccord Genuity Financial, some of whom joined as foundational investors.
With this partnership, venture capitalist Mark Carnegie aims to expand his digital assets business as a ‘fund of funds’ offering Australian investors unique opportunities within the crypto, blockchain and Decentralised Finance (DeFi) space.
As part of the arrangement, Mark Carnegie will assist with the distribution of the Fund for a part ownership in Ian Love’s management company.
Returning 472% in FY20-21 and 245 per cent since inception in 2017, the Fund has survived the ‘crypto winter’ of 2018-19 which cleaned out several other crypto funds from the industry.
Speaking on the partnership, Mr Carnegie said, “From the start of my research and investment journey into this asset class, I have emphasised the importance of having extensive technical knowledge and network within the global cryptocurrency community.
“Ian has made some exceptional gains for his investors over the years. His fund complements our existing suite of crypto offerings and I strongly believe we could both work hammer and tongs for the next decade and still we wouldn’t be able to soak up the demand that’s coming,” he added.
Ian Love, Founder and CEO of Blockchain Assets said, “When I saw that Mark had joined the crypto space, I felt that this was Australia’s Paul Tudor-Jones or Stan Drukenmiller moment – when a traditional finance legend came out loud and proud about allocating crypto to his portfolio.
“I contacted Mark via Twitter and we had an immediate connection as fellow travellers in this space. I am delighted and honoured to be his partner,” he added.
Both men have also joined forces in advocating for regulation in Australia that allows retail investors the very same opportunities that have previously only been open to the wealthy and well connected.
“While wealthy investors continue to enjoy the benefits of regulated markets, retail investors, who need protection the most are left to fend for themselves. This does not sound right to me… ASIC should try harder,” added Mr Carnegie.
A bigger deal than the Internet
Both men are aligned in their belief that blockchain technology and crypto markets are reducing wealth inequality and enabling the ‘democratisation of capital’.
“I have been looking for new business models that are enabled by blockchain technology in the same way that Facebook and Google was enabled by the internet. But there are vast differences between investing in the internet versus investing in blockchain technology,” said Mr Love.
“With the internet you could only invest in the application layer such as the FAANGs, you need large capital and the right connections. Despite the extremely hostile investment environment, that model created the world’s most valuable companies.
“In blockchain, retail investors can invest as little as $100 in a start-up project, either in the application layer such as Coinbase or protocol layer such as Bitcoin, without obtaining permission and can easily liquidate when they want.
“This technology allows anyone on the planet with a smartphone to invest in any asset, from fine art to gold to currencies and stocks,” he added.
Echoing Love’s views, Carnegie said blockchain technology is 10 times more powerful than the internet.
“It’s an incredibly friendly and accessible investment environment and you’ve got a wealth creation opportunity that I have never seen in my lifetime,” said Mr Carnegie.
“Remarkably, smart money from sophisticated investors is resonating with these ‘new economy’ technologies. However, traditional institutional investors have been absent from this market due to regulatory constraints or their own reservations,” he added.
The next big opportunity
Mr Love said he believes the best assets in this ecosystem haven’t yet been invented and the price on certain second and third generation assets is yet to pick up compared to the growth of Bitcoin.
He acknowledges the gaming sector as the initial pathway for onboarding billions of people to blockchain technology and crypto and identifies ‘Play 2 Earn’ as the next big thing in this space.
“According to International Data Corporation data, the video game industry is a bigger money maker than the global movie and North American sports industries combined. Axie Infinity, a Pokémon-inspired universe where anyone can earn tokens through skilled gameplay, is one of the early examples of how this technology will manifest itself in the real world.
“We are super excited to be exploring these opportunities for our investors,” both concluded.