ConsenSys Capital co-founder Andrew Keys will be the newest managing partner at DARMA Capital, a registered crypto-focused investment fund.
Announcing the move Thursday, Keys said he will drive product strategy and global business development at the firm. He joins John and James Slazas, the latter of whom was the former head of capital markets at ConsenSys.
DARMA (Digital Asset Risk Management Advisors) Capital is a CFTC-regulated firm, as well as a member of the National Futures Association, with $100 million in assets under management for its Ether Optimized Long fund, Keys said in a blog post. The idea behind the ether long fund is it will accumulate more ether as time goes on, thereby generating a return for the fund’s investors.
Keys told CoinDesk that his goal is to accumulate 1 percent of the fund’s total per month, minus fees.
“So if you gave me 100 ether, my goal would be to produce 1 ether a month,” he said.
This isn’t the same as “hodling,” the popularly misspelled term for holding crypto over a long period of time, according to Keys, who said many investors in crypto who held through the recent bear market “probably [don’t] want to hodl.”
Rather, he said, the point is to “create alpha,” or an active return on an investment.
While DARMA is starting with an ether long fund, the firm plans to launch a bitcoin long fund in the coming months, with a third fund based on filecoin sometime next year. Said Keys:
“We believe [those tokens] will be the components of the next-generation internet and essentially there is a new asset class in what I would call crypto commodities. So we’re not interested at the application layer, we’re interested in the protocols that many different applications will use.”
Not a departure
While Keys has transitioned to working full-time at DARMA, he will remain an advisor to ConsenSys, he said. Likewise, DARMA will be utilizing ConsenSys software, and working closely with the ethereum startup incubator.
ConsensSys will remain an investor with DARMA as well.
Still, the shift matches Keys’ personal interests, he noted.
“My core competency has been in finance and my secondary competency has been in technology,” he explained.
ConsenSys is focused more on the technology side of the crypto world than the financial side, but Keys said it is important to build some regulated funds in the space.
“There’s a void in the market, and this is a simple solution and I think a necessary missing piece of the market,” he said.
“I think the investment stage, if you look at the PwC blockchain hedge fund report, over 70 percent of them have less than $10 million assets under management, half of them don’t use a custodian and it’s very immature. We have $100 [million] AUM, we have one of the best custodians in Opus, we have KPMG as an auditor.”
At present, only accredited investors, family offices and institutions can participate in the fund.
Keys said he intends to reach out to potential investors.
“I spent the last four years explaining blockchain to large institutions and central banks and almost anyone who’d listen,” he said, adding:
“And now we’re going to dial it in specifically to eligible participants, family offices, institutions who are recognizing the next generation of the internet who don’t understand where the investment opportunities are.”
Photo courtesy of Andrew Keys