DigiMax Global (CSE: DIGI) has entered into a letter of intent to acquire the rights to a global crypto currency hedge fund. The fund, known as Barberton Funds SPC, is to be acquired from Scotstone Group in concert with Seneca House Fund Management.
The fund is effectively focused solely on the crypto currency space, where it provides a “fully systematic long/short active investment into a basket of cryptocurrencies capitalizing on crypto volatility and powered by proprietary trading algorithms.” The fund is to utilize DigiMax’s CryptoDivine.ai trading tool as the basis for much of its investments.
Effectively, the fund is to offer what is deemed as alternative investments to high net-worth individuals as well as institutions. The company expects minimal cannibalization from its current subscriber base as a result of the US$100,000 minimum investment in the fund. Furthermore, the fund reportedly has all required third-party service providers in place.
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Portfolio management of the fund is set to be conducted by Seneca House Fund, with the fund expected to be open by August 2021, saving DigiMax roughly 12 to 18 months had they started the process themselves. DigiMax is set to sell its exempt market dealer as a means of avoiding any potential conflicts of interest.
The fund is to be acquired at a cost of US$125,000, and the covering of past and upcoming filing and legal fees, as well as certain oncoming development fees. The transaction will see Seneca House retain a 20% interest in the fund, with DigiMax having the option to purchase an additional 15% for 18 months, at the higher of $1.0 million, or 2% of assets under management. The transaction is to close before April 30, 2021, with the offering of units to begin by August 2021.
DigiMax Global last traded at $0.27 on the CSE.
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