Institutional investors and wealth managers are increasingly focusing on digital asset yield strategies as they continue to engage with the asset class, according to new global research from CrossLedger Capital.
The firm’s study with pension funds, wealth managers, insurance asset managers, family offices and hedge funds in 13 countries found 90 per cent are looking for innovative approaches to managing digital asset yields. Around a fifth (22 per cent) want innovation with strict risk control while 68 per cent are exploring innovation although they are risk averse.
Just 10 per cent of the firms questioned in the US, UK, UAE, EU, Brazil, Singapore, South Korea, Switzerland and Hong Kong said they were sceptical about digital assets or preferred traditional credit strategies.
The research from CrossLedger Capital found 82 per cent believe it is essential or important that operational issues are handled by a trusted external partner when adopting new yield-generating investment solutions. More than four out of five (83 per cent) say the availability of transparent data and independent benchmarks is essential or important when considering a new investment strategy.
Transparency of the underlying asset and borrower is seen as most important for confidence in allocating to new investment platforms or strategies with 73 per cent selecting that while 70 per cent point to integrated compliance and KYC reporting. Around half (46 per cent) say third party audit or valuation of returns would give them confidence in allocating.
