Institutional-Grade Crypto Investing: Fund Managers Reveal What’s Working for Family Offices | EBC11

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Awesome. Thanks. >> Well, as you guys can see, we're going to be short one person today. Tommy unfortunately couldn't make it, but uh I guess on that note, I'm not sure why I decided to bail because because when someone called me and said, "Hey, will you want to come and have a conversation to moderate a panel in Spain when I'm coming from Canada?" I think it was pretty hard to say no. I hear the one Canadian out there that laugh. Thank you. Uh but on that note, so we're going to do a conversation today guys just to uh more candidly talk a bit about family offices and how institutional grade investing in crypto works for family offices. Maybe to set

the context for one thing that's not talked about a lot is in crypto investing. Family offices are one of the very tip of the spear and early investors that really came into the space. Uh from an institutional side, we've all been waiting. we've all been talking a lot. They were really early on in it. So, this would be more of a candid conversation of what's worked, what doesn't work, uh what unique needs they necessarily have, um and what pit holes you can typically fall into. So, maybe on that I'll give just a brief introduction from each of you guys. Rob, did you want to start?

>> Sure. So, I'm Rob Dario. Um I'm a Treadfi professional. I've been in the space uh trading, structuring, quant for uh about 30 years. uh worked for various banks and um institutions around the world. Um I moved I started Alpha Party about three years ago uh where I saw that there was a lot of alpha in crypto markets and there was an opportunity to really make a lot of money to be honest. I mean I didn't really see a lot of trading teams that I thought were fantastic. So I thought we could come in and do a pretty good job. Um so that's where we started. We started trading with our own money, our own prop capital. We picked up some SMAs later on along the way. Uh then we started Alpha Party Capital. Are we starting Alpha Party Capital on the 1 of November next

month? Uh that's what we've really evolved into. Um and uh we've got soft commitments of 100 million at the moment. Got BTC, USDT, uh US and Swissy share class. So uh so that's going really well. Um so that's us in a nutshell. Lewis, you want to >> Hi, Lewis Harland from RE7, a portfolio manager running the liquid alpha strategies. We run 1.5 billion firmwide and uh really across all different investment strategies. So, liquid alpha, VC, market neutral, um, etc. So, yeah, thank you for having me.

>> Yes. Hello. And, uh, my name is D. I'm with FK. There was a panel before with FK, so you already had a small introduction, but I'll give it again. FK is a, uh, traditional asset manager. We manage 175 billion globally. You all know us probably from the ETFs, uh, but we also do crypto since 2017. I'm involved with the crypto hedge fund. Um we grew from 25 million in 2022 to 200 million today and we are quite successful at what we do. Uh I'm the trader of the fund running the operations and uh yes happy to be back in Barcelona and uh hope to uh share some offer with you tonight.

>> Uh good afternoon everyone. I am Bernali Visual. I am the CEO of Hbert Group. Hilbert Group is a publicly listed digital asset investment firm uh originally from Sweden. Um we currently have various verticals of the business. Prime one being asset management. We run about 500 million um in assets. Um but we also are very heavily invested um and active in DeFi and web 3 etc. >> Thanks guys. And then just as a brief introduction myself, uh yeah, I'll be moderating the panel today with this crowd. Uh my name is Josh Wuber as one of the managing partners of Veloc Trading. We're a quantitative investment

manager. My background uh is from as an ETF issuer. So I do not know who keeps putting Veneck on all of these panels. Uh we very actively try to not have that happen. So where wherever the ETF panel is from earlier today, you got to have a conversation with the organizers here because they're getting a lot of air time. So maybe to set >> Thank you very much. >> I don't understand how I really tried. Uh maybe to set the scene and kind of kick this off guys um I'd want to hear from all of you on this is just give us a state of affairs u like when people are talking a lot of family offices. Uh what what exactly are the subjects?

Everyone says the institutions are coming. Are they actually investing? Just take stock. What's the state of affairs? I'd put over to you first Rob. >> Sure. Um look state of affairs it's a it's an interesting state of affairs I think really if we're looking over you know we can take a couple of stages right so if we go back say about 5 years uh the kind of questions I used to be getting from institutional and families was really around you know is this real what what is BTC you know is it going to go zero those kind of questions which are really questioning the value of the asset class and if it should even exist right so really more recently the questions that we're getting have changed a lot right I mean the questions I'm getting tend to be more around um they're more they're more consideration

questions like where do you see BTC going where do you see the regulatory environment evolving um and um certainly from families there's a lot of questions around education right they want to know they want to be educated about the space they want to understand how uh the market participants are moving in um I guess it was pretty broad question the other question more around um institutions I certainly see a lot of institutional flow coming into the space now and we see that in terms of compressed margins on uh on site and alpha as well. I mean a lot of alphas come out of the space I think in the last 12 months right >> thanks Rob Lewis >> they're definitely here um in terms of family offices um it's an interesting development over the last few years where part and parcel is really the

educational piece where you get the classic what is DeFi what is stable coins and I think naturally over time uh people recognize what actually it is even without sort of really understanding at a deep level um so it's just kind of this kind of salency effect which is Oh, I've heard about stable coins yet again and you see it on the headlines. So, there's definitely that kind of surface level piece. Um, but in terms of what they're interested in, it tends to be maybe market neutral. How do we kind of look at riskadjusted returns? How do we think about consistent yield? Liquid alpha, how do you make sure you're actually generating kind of investment strategies from that in a safe way uh and not a reckless way? Do you use leverage? Things like that. So, it really comes with time about, you

know, what are they looking for? because we find that family officers really can differentiate from their interest. Um or they may actually look for something like a master fund setup. So they actually say, "Look, we're in private equity. We want a secular trend play here. We'll invest in a master funds and actually we'll have a long long long-term capital lockup, but actually you can play across cycles based on various different investment strategies, which I think is definitely a first over the last few years." >> Yeah, great point. Ties. >> Yeah, I mean I couldn't agree more. uh we have been teaching family offices for the three years that we have been around. I just want to add one thing and that's also the demographical shift from the younger generations within the family offices. So we are talking to very young people there are between 20

and 30 years old and they have to decide of the future of these family offices and they come to us they want to invest in crypto. Next question is of course how do they do how do they want to do it? Uh so some invest in Bitcoin, some invest themselves opening portfolios within the family offices, but some come to us and just give the yeah like the expert the experts the uh the room to invest for them. Um but yeah, it has been interesting to see right now and I think especially last year we're seeing more and more family offices uh actually uh allocating their funds to for example RE7 or to FAC um which they see we are outperforming their maybe internal portfolio. So probably the reason why um but yes it has been uh the shift has been good uh every year we're seeing

more and more uh adoption and um yes at this moment I think it's a very very >> better now we're back >> yes we're back. We're back. >> Are the family officers still here? And then I'll go to that off >> just [laughter] in time for you. Bernali, did you want to put one little comment on that just for uh Yeah. What what really are they investing? Are they here? I mean if we look at the numbers that definitely says that's the case because like any polls of uh any of the

trad uh usual names without naming them if you look at them seems like we have about 25 to 30% of the family offices from the total that are invested in some capacity in digital assets. Um that's up significantly from 2021, let's say, which was 15% roughly. Um and but what's typical still is that it's the investment level is still under 2% of their total AUM. That hasn't changed. Um there is definitely newer family offices that have come in and that's primarily driven by the ETF introduction. um they're more comfortable and and uh sort

of more uh it's easier for them to enter that via that route than sort of hedge fund or doing uh directly themselves any kind of acquisition of digital assets. Um the second point to your question that I just want to add to these um what has been uh said already and that is the the conversation has shifted to the direction of maturation in general. I would say not just uh the market and therefore the infrastructure and so on and so forth but there is a distinct conversation now with the family offices that we meet with where the focus uh is

on building something long-term visav max return or consistency of return and I think that's a marked difference and that's relatively new. So would you think that's more to say an outcome orientation like an objective to achieve versus to your point max return? >> Yeah. No, I think it's actually just more professionalization. So if I were to say you have a you the allocator or the CIO at any family office has a mandate to allocate to digital assets.

They're not necessarily looking at okay this is this.5% of my portfolio. I just need to pick whatever is sort of looking like the best cobbled together operation and you know hope it doesn't blow up but even if it does blow up I have covered my downside. Whereas when you have a mandate you have to scale and you have to have repeatable investment managers that you can go back to and have a longer term relationship that conversation is certainly starting. >> So more than just number go up. Rob did you want to have a comment there?

>> Yeah I just had a comment about the space in general. I mean just adding to what we were talking about before I think of the families that are invested in crypto initially it was really around so anybody that's actually bought into the space already initially it was really around VC you know but more recently over the last 12 months we've really seen a switch from VC to liquid and that's been a really big shift right so for the people already invested they're saying well okay now I want to go into into liquid and I think that's that's a really positive thing for for all of us definitely >> yeah I I I completely agree with this um this observation and one other thing that I would I would highlight that we haven't talked about is like sort of the jurisdictional uh differences or geographic uh

proportionalization which is Asia still leads whether that is institutions whether that is family offices most definitely in the family office sphere there in in in our uh investor base they're probably I would say by just extrapolating ing they're somewhere in the low 20s mid 20 percentage range. Uh Europe is the least invested. They're probably in the 12 to 14%. And US is somewhere in the middle. And you know we see that US spot incrementally ticking up but Asia is by far still continues to stay ahead.

>> And I think that maybe I'll come right to you on this Lewis. I think that's a perfect segue into what my next comment was going to be is there's in crypto specifically it's been very unique in family offices of different structures and formats in investing. So not the product itself but the actual format. What what have you guys seen and I put this to you specifically first Lewis is what have you guys really seen around that you know you get SMAS um or separately managed accounts you have hedge fund formats you have venture like what types of structures are very specific that you've seen them want to solve and is that trend changing >> yeah and I was going to say the the key point from that and I completely agree and I'm sure you guys get it as well which is when you talk about family

offices it's so relationship driven and it's almost deeper and kind of as broad within that depth, if that makes sense, with singular people. So, you've got to build that relationship. They got to know how you do things inside and out. They're not just going to give 5% of, you know, their portfolio to people that just have, you know, one-year track record on a garage band hedge fund. It's just not going to work. So, that's definitely the key takeaway from that point. And it kind of leads me to your question which is you know we've had engagement on the kind of pure Cayman fund structure but we also again this master funds where that long-term relationship is expressed in terms of the strategy itself which is at the master fund level. So for us it's really a combination of market neutral it could be VC uh it could be um special

situations which guess we haven't discussed and then liquid alpha as well. So they also recognize that cycles change and the best expression within that cycle also changes and so but they need that sort of education and peace and almost rely on a high reputable firm to carry them through cross cycles and that's definitely come out of the uh the conversations that we've had and it's it's quite clear they're thinking long term but really doing quite deep due diligence in that way. So maybe Tai, do you want to add a bit to that just from a different flavor since your structures are obviously more much more vanilla to the family offices?

>> Yeah, I mean I have to agree completely with Lewis as well. I mean even after the investment, so if if they invested 5% of the family offices, you still have to hold their hands uh during the investments because the crypto market is shifting so rapidly. You have to keep explaining that the next investment you're doing has a different thesis than the last investment and why you are adapting to the space. uh I think in 2022 we had a crypto portfolio that consisted only out of crypto tokens and today we have most of our funds in listed equities which have something to do with blockchain or tokenization. So things are changing so quickly that uh you have to stay ahead of the market but family offices also have to be educated even after the investment. So it's not like I'm putting 5% in crypto and that's

it. Uh it even goes way further. Yeah. >> Make my job too easy. That's the perfect lead in that I was going to ask for. So, how has this changed like 12 months ago to now? I mean, I know you were up in the stage uh last year at the same conference. Um, also Nordics's trying to escape the winter. I feel that. Um, what's changed in family office conversations 12 months ago to now? You mentioned maturing. Uh, love to get your thoughts on that. >> Yeah, sure. Um, I think few things to take away here. The biggest one being the US regulatory landscape shifting. Um and and also Micah coming to full uh implementation and just generically with

the new US government it seems like rule there there is path to getting some rules of the road which naturally increases confidence. We did not have that um you know in the past. So a lot of our conversation has been how should we prepare for this when this comes to uh effect? Um how do I get ready? What what are the things I should be looking at and and being prepared for? Um and then the second thing is there is a you know that the entire industry especially post FDX has gone

through a really upgrade in terms a real upgrade in terms of infrastructure and that maturation also means that there is like again more conversation around differentiating different operators with respects to how they actually conduct their business. So there's a lot more conversation I would say on processes, operation, risk management, systems. I don't think that was the predominant angle prior to 2022. >> And do you think then would you say now that they're asking more of arguably deeper due diligence questions, are we still are we out of the learning

phase? Are there still a lot of teaching of like, hey, this is what crypto does or is it past that now? >> No, definitely not fielding any questions. What is Bitcoin um any longer? Um >> that's new. [laughter] >> Yeah. But I I I would say though typically uh you do not given given the business model that we have we don't necessarily have a lot of audience that isn't already cross that Rubicon by definition. You're not going to look at an alternative investment manager if you are questioning the validity of digital assets as an asset class itself. So

that's there's some selection bias there. Um but but to one of the previous points Josh like >> earlier there used to be oh fund um structures for example still was sort of like popular I would say with many of the family offices and that was because a lot of them are one are familiar with it and two they find it easier to onboard onto an admin fund admin compared to onboarding to exchanges onboarding to custody, understanding the processes around it, having a dedicated crypto back office person for it. So that was I would say actually 50/50 in

terms of preference of uh mode to access the asset class. But I would say there is still a significant tilt now towards SMAs especially when you look at fund off hedge fund offerings. Um because people ultra high net worths and family offices still believe they want to build some trust via SMA and then they would be you know more comfortable on the fund structure. Yeah, I think the FTX scenario still uh that trust has taken a long time to rebuild on it. Do you maybe want to make a a comment there, Rob, on how things have changed?

>> Just on the structure with respect to SMAs and funds, I mean my observation is a little bit different. I mean, I've seen more recently a swing from SMAs more towards funds for the larger families that are interested in making investments, right? Because they're much more comfortable with a fund structure, right? They want to know, you know, we I actually had this this story. I was talking to this um family office in Texas, right? And we were talking to their lawyer and who's a very experienced guy and this is a multi-billion dollar family office, right? And uh we were talking about issuing API keys for an SMA and things like this. And the lawyer asked me, "So what do I do with the key? Like where do I where do I put the key?" He thought there was like a physical key that you put into a lock, right? I bet this is a

very experienced guy, right? So you know for they >> not experienced in that part. >> Yeah. Not experienced in API keys and these kind of things. So it's not something that they were really comfortable with but fund fund allocation they do it all the time right so you know we have a Cayman fund and for them it was very easy to allocate right but obviously other related issues but um but that was that was that was an interesting conversation so I I think that there are a lot of families over there who are quite comfortable allocating to funds but they don't want to mess around with SMAs and all of this kind of stuff um and more recently we have seen a swing from SMAs to more fund uh more fund in investments. So I think that's something I've seen.

>> So that again another great segue. Um maybe to take this and switch just directly into product. So the actual products they are investing in which we we kind of loosely grazed over for now but I think Lewis the most loaded or charged topic still comes on DeFi. You know RE7 obviously is one of the premium DeFi hedge funds globally. What's the reaction when you bring up DeFi in inside of conversations in family offices? You know, it's predominantly been retail um sometimes has uh really good riskadjusted opportunities, but can have a bit of a stigma behind it. What's their response to that? And how do you abstract those complexities away?

>> I think part of it is just saying, you know, it's it's at some point in the future it's not really going to be called DeFi. It'll just be called finance. And I've sort of held that opinion for a number of years and maybe we're not quite there yet. Um but again it goes back to this educational piece which is you know we spoke to a very large family office in Hong Kong VMS which actually started to deploy into crypto. So, we're very happy to work with them. And uh I remember going through these questions in the early days around sort of, you know, for us, we're really a bet on stable coins. We're really a bet on DeFi, TVL, we're really a bet on dot dot dot. And you start with these sort of tagged headlines and you sort of bring them down that rabbit hole, but you sort of

understand how far they can go without then having to double down on certain terminology and you stop there and then you kind of work your way down. But for us it was really that you know hold holding their hand down that rabbit hole bit by bit. But one of the points I wanted to make earlier is this really interesting discussion where this education piece is more about the technology but they don't not really interested in like the private keys the operations. So it's almost like they don't really want to know that side of it. They just want to they they've got a time sensitivity to capturing what is happening before their eyes. And so they want to learn exactly the market, the different type of assets, tokenization of real world assets. We were talking about backstage and that's really going

to be the catis I think for the next wave of growth and we're seeing it not just in the west but in Asia as well. So for us, we we tell them about that and then we tell them about this rabbit hole saying, well actually if you think about all of these tokenizations of real world assets, they're like, well, we've we've gone down the rabbit hole of the first few steps and it's not that big of a leap to then say all these assets that exist in the real world, just bring them on to everything we've just taught you on chain and like this is an unbelievable sizable opportunity again based on our risk appetite. This is how we want to get involved. But it takes time. Yeah, I actually asked that exact same question a year ago to one of your colleagues on the same panel and it was

a very different answer. So, it's interesting to Bernali's point to see the delta have changed there. But maybe Bernali, I know you guys do a bit that's adjacently within DeFi from the Hilbert side. Um, do you guys encounter that with family offices to talk about do they ask you because you kind of stride between both? Yeah, I mean we are a little bit of an interesting and unique animal I would say given we are we are a public company so you know a lot of the family officers just simply want access to the space it's easiest for them to just buy the stock for example um but also within our verticals as you said we are seeing various different type of focus but going back to what actually

underscoring what Lewis was saying uh lot of these um family offices and frankly from sort of like my vantage point as the operator it kind of makes sense in no traditional finance do allocators actually sit down and and do you know kind of get involved in the sausage making I mean a lot of that has been abstracted away and it is a formfilling exercise in in for the back office and they expect that as the users um for our industry to deliver. And over time what has happened with like players

like R7 and others they have done an excellent job of actually abstracting a lot of these technicalities and you know knowing the jargon and sort of like managing operational nuances away and once that sort of hurdle is slowly taken down bit by bit you have more and more interest regardless of what is being brought on chain. I think I I I by the way fully subscribe that there's there's going to be one finance but there isn't that resistance to going onchain necessarily from some sort of philosophical or ideological point of view. It's very

operational and technical in nature and they just find it really hard. It's not like you have thousands of oper uh crypto back office and ops people that they will just all of a sudden hire and get smart on overnight. >> Yeah, that's a great point on it. The uh the only other extension I have for both of you really quick is um in the context of vaults have family office ever mentioned that and maybe Lewis to you very quickly first is if you want to just explain what a vault necessarily is. Yeah. And well, yes, it is. It's being brought up again part of the education piece because again, down that rabbit hole, you can get to vaults eventually. Um, to answer the question, you know, contextually for us, we started with the fund management bit within the firm and

then starting with a brainstorming call, I think about a year and a half, two years ago, we said, well, actually, how do we think DeFi will innovate? What's the next frontier? And we really thought customizability and functionality and modularity was going to be the next wave. So for us it made sense to be a curator of risk. So instead of taking LB money into a fund structure, we could say well actually you can open up deposits on chain through a more modular lending protocol for example uh we take that and we can direct that indirect asset uh management uh for yield generation again keeping everything on chain. So we don't touch the assets necessarily uh but we kind of direct the yield and where that's sourced and there's obviously some complexities that come with it. One other thing Josh I

would add is I have um seen with with respect to many of our family offices that that have been invested uh for years I would say 3 to 5 years at this point they already own for example Bitcoin ether whatever the natural next question is how do I put this to work without going back onto the fiat rail so we are also seeing sort of the an organic interest growing >> and this is really crucial. So whether it's the family office or we have a fund of fund that actually defines their balance sheet in soul terms. So it's an interesting conversation for them is like well actually you need to grow our soul balance. We're like great. Um but point being is that you know with a

family office they may even have exposure to BTC. So we're like well actually based on these different strategies uh you can actually put some of this BTC oh in our vaults which isn't necessarily part of the bread and butter of the fund management bit but as a firm we're kind of providing end to end where regardless of what strategy you want within DeFi or crypto we're kind of that point of contact to say well we can service it which is great and it obviously helps with the discussions I'm sure it's the same with you guys and van where um you know if we're doing a raise or we're investing in something on the liquid side then obviously our experience on the vault side really helps with that. All the L1's and L2s they're looking to grow their TVL or their ecosystem. Again, we're the onestop shop for that given the

experience that we have. It's interesting then even the fact they're actually asking about onchain asset management that rate of change is extremely significant. I know I from my own experience I can say that's uh no one was asking about that a year ago. So on a different note of product but very unique to family office conversations. Um I wanted to talk about Bitcoin and Bitcoin denominated. So I know a few of you guys have products that fit that. So the the two things I'd say maybe first to you Bernali and then I'll ask you uh T. So first is what is Bitcoin denominated strategies? Why are family and why are family offices asking a lot about that at the time and your experience?

>> Yeah. So this goes back to the point that both L and I made which is that a lot of our the the family offices that are already involved in this space and the incoming ones as well their first point of contact has been Bitcoin whether that is just spot bitcoin or ETF but that's sort of their initial point of entry and uh the natural next question that we are getting not just from family offices as Luis said also from onchain wealth or crypto wealth um as well is that we have a large swath of bit uh passive bitcoin holding that is not yielding any

income and therefore what are some of the ways that we can generate income while keeping the exposure to the bitcoin constant so or or grow um so a lot of the bitcoin coin strategies are trading or otherwise um ways to generate yield on Bitcoin i.e. for one bitcoin to get 1.15 bitcoin. Um, and it it's a little bit of a departure because pretty much all of the product offerings uh prior to I would say about a year ago um in crypto space has been dollar denominated or fiat denominated

in some format. So I actually think this entire year and probably even half of last year it has been the like the fastest growing and and most asked question from uh family offices and and when it comes to Hilbert we have various offerings our own sort of like in internal asset management side of it we generate um Bitcoin returns via option strategies few of the other in uh basis ARB and yield curve um related strategies but also we have partnered with Tommy who's not here but Zapo Bank one of the sort of Bitcoin banks and

custodial uh firms and we have created a structured credit solution which also provides a very low risk low volatile way of earning credit like returned. So there is lots of ways to slice and dice this and a lot of the um innovation we are seeing in the D5 space. Um and if just to add on one last point on this, it also makes sense for us to take this all these offerings and simply tokenize those things to bring them onchain in order to meet the onchain demand uh

demand as well. So I think this is all quite related again to the fact that the conversation has matured and therefore the mandate is wider and that is leading for the the sort of capital to chase different types of u yield opportunity >> and then ties I know you'll come from a bit of a different perspective is that are family office is asking you guys as an ETF issuer a lot about that type of product >> no I mean we we just launched the the Bitcoin ETF uh that's where family officer starts and first of all I have to say of course you see lots of family demand with family offices that were previously before Bitcoin investors in gold and they shift to the digital gold story um which is uh pretty good for us

because we have the ETF but then for the yield strategies yeah we we don't want to implement that so you said just one bitcoin to 1.15 I haven't seen any 15% yielding strategies if you have them we will talk after the after the panel we we don't give away prop >> but yeah Yeah, there there is a bit of risk also of taking the if selling the bitcoin ETF and bringing uh rep bitcoin to a layer 2 and uh yielding like what I'm seeing five to 6% there comes a bit of risk for that. So we don't get that question often. They often ask us about the about the bitcoin ETF or the or the how do I get uh bitcoin exposure in general. So maybe that's more condensed specifically to um crypto wealth that have went to a family office is perhaps

than a family office that then has acquired crypto wealth. So I guess then probably the last question that's going to fit on this subject matter um and the most classic I start with you on it Rob is like active versus passive hedge funds versus ETFs. Tell me what where's what's what's the inception point of where does a family office start when they're investing in crypto? >> Passive. Passive and generally VC is what I've seen previously, right? People just buying BTC and holding on to it. >> Tai is smiling an awful lot.

>> Yeah, of course he's smiling. He's got the ETF, right? So look, um that's really where it starts. But then the next question, as we talked about before, is where do we get yield? Right? People are holding large amounts of BTC and they want to know what they can do with it. I mean, I think for a lot of funds, one thing that they can do if they're not on chain is really to look at, you know, BTC share class. You know, that's that's really something that people still don't really understand completely. You know, I talked to families and I was talking to a guy um he's got over half a billion in BTC. So, I had a coffee with him and I told him that we had a BTC share class and uh he said, "What does that mean?" I said, "Well, you know, we hedge back to BTC.

You can actually natively allocate to us in in BTC without going to fiat. uh we can give you a a return on your your BTC and you can keep your BTC and he was very happy about that right so I mean um understanding those kinds of strategies how they work how the hedging works it's an education thing um but I think that's that I think that's pretty interesting now going back I guess more towards the the active I think we will be more moving more and more into active management going forward but again it's a it's a function of the space and the asset class becoming more sophisticated and more mature I think it just takes time for all of this stuff to happen so there's education that we need to do and you know talking to as many people as possible and and sharing as much

information as we can and then you know get get them to the consideration point where they they think you know I feel like I'm I'm comfortable making an allocation. So I think it's all part of it. >> So Tai, if you're going to be the tip of the spear then my friend tell me what uh >> yeah I mean I have to agree with with Rob where people start with passive investments. Um but yeah it's the same as stratfire right? So you have passive investments you have hedge funds. If a hedge fund outperforms consistently, the the family offices will look at the performance at the end of the year and say, "Okay, maybe I should allocate a little more in active because active is outperforming your passive investments."

So then it makes sense. Um, but right now, yeah, we see lots of family offices just buying the ETN or the ETFs first and then we try to explain what other strategies we have in house and yeah, we hope that eventually they will have both. We are not advising to have the one or the other, but uh to to have it as a complimentary strategy next to being exposed to Bitcoin. Yes, >> you mentioned that. It was a good point. You mentioned a lot about on you have a lot of investors that are in your gold products too. Are there other asset classes on your shelf outside of crypto that you see family offices start in and then make a merge? So, to your point before, do you see them start in a gold ETF product and then say, "Oh, what's an adjacent relation to that? We want to go

do a long short fund." Is that a topic of conversation? I think it has nothing to do with crypto, but the best ETF this year was the defense ETF. And I have no idea how we can shift that to crypto because yeah, defense crypto. I haven't heard of it, but maybe that's a starting point here to to create a crypto that has to do something to do with with defense. I don't know >> in time. But so the last I think the the last subject matter I'd want to bring up to go across for all of you is I think probably the most important question for the audience, but more going forward. We've talked a lot about the rate of change. Things have changed very aggressively in 12 months. But you know going forward, we all want to see more adoption. We know family offices is the

starting point of institutional investing. We all know that a rising tide will lift more boats by far as opposed to the PVP. So what's going to be the the single main catalyst in like a minute each? What's going to be the main catalyst you guys think that will create the more adoption? I'd start with you Robin. I'll go down. >> Um just understanding and education. You know, people just need to understand more about the asset class, how it works, and be more comfortable with it. So, you know, I think our job as advocates for the asset class is really to talk to as many people as possible, do panels like this, you know, go to breakfast, go to lunch, meet people, talk to them about what's going on, and then that education, you know, give them research as you have it, interesting nuggets of of this and that, and then

ultimately they'll they'll come and make an investment. I'm going to use the word in the kind of sentence, but institutional grade strategies and infrastructure and it's I don't it's almost quite obvious. I don't want to say it, but it's just, you know, they're looking for it, especially on the risk management side. Uh especially after this weekend that we just had, largest liquidation event of all time in crypto. Um they're looking at stress tests like that. How did you hold up? What was the process? Because it really exposes people in terms of how they're managing things. And so that coupled with the maturation around tokenization of real world assets I think is really going to be that next catalyst beyond say regul regulation change.

>> Yeah for it's definitely stable coins. So stable coin adoption I think as well for family offices right so we seeing more and more investors they invest with stable coins instead of USD or uh euros I think if family offices getting more aware of uh how much stable coin payments that are being made on a yearly basis and what projects are benefiting most from stable coins. I think that is going to shift uh everyone into crypto because right now we're seeing more and more stable coin adoption. More and more companies are adding stable coins uh as a payment uh method. So we have now uh in June we had 16 companies of the S&P 500 mentioning stable coins in their earnings um uh calls. So I think we're heading into stable coin adoption and from there we are seeing more and more investments into crypto products but

also into crypto hedge funds. Um and that is the the main thing for us. Yeah. >> I there no much more to add. What I I think is um obvious thing is that we still have a boatload of regulation to get and that will that'll be the near-term unlock in terms of actually getting more players like Vanic and you know other larger traditional finance players to come in and and be involved. And it is not about legitimizing the space per se but have that breeds confidence that there is sustainable alpha and sustainable return

to be had. Um and that that that's goes without explanation. And the second point it was mentioned by this at some point but like the it this the generational shift is underappreciated. 85% of the family office principles will change hands uh within the next 5 years. That's that's a substantial >> number. Yeah, it's a lot of wealth. >> Awesome. Well, look, that's all for uh the subjects for this guys. So, just wanted to say thanks again for coming to join the panel on it and just give everybody give a round of applause to our panelists.

>> Nice work, Josh. One go.