The purpose of this post is to demonstrate the client reporting features within the Strix Leviathan Investor Portal. The investment data contained within is for illustrative purposes only.
Hedge funds are notoriously secretive in their operations as they attempt to preserve a trading edge among fierce competition. As fund managers have begun emerging in the digital asset space, by and large they have also adopted this reticent communication style. The irony here is that blockchain technology, upon which all cryptocurrencies are based, is lauded for its ability to provide full trust and transparency to everyone. In reality, providing full visibility into all holdings is not a straightforward endeavor either. Pooled investment vehicles are subject to various regulatory rules and guidelines about disclosure of information. Therefore, fund managers often choose to disclose only the bare minimum information necessary to investors.
When we launched Strix Leviathan at the end of 2017 we made a number of commitments to each other and our clients. One of these commitments was to establish and maintain trust with our investors. Trust within the investment industry is in part forged through communications, specifically through regular investment reporting that provides allocators with sufficient information to fully understand the risks they are exposed to.
We recognize that our clients are portfolio managers themselves who need to understand how their digital assets investment resides within their greater asset allocation challenges. The ability to analyze position allocations and performance drivers is critical and a top-level monthly return number simply does not cut it. In this nascent asset class, the need to build trust with our investor base is two-fold. We must not only provide detailed information about client holdings, but we also must provide education on the benefits and risks of a portfolio allocation in this space. The past few years have established that digital assets have evolved beyond the days of the Silk Road, however it still suffers from those days reputationally.
To that end, we created a digitally native experience for our investors within the Investor Portal. The Investor Portal is an important source of information that is leveraged by our entire client base and select service providers. For some time now, our investors have been able to access their accounts and view all historical capital transactions, investment returns, and management and performance fees paid.
We recently rolled out a new and enhanced monthly performance report that elevates the client experience by providing deeper insight to their investment exposure. A demo version of this report can be found below:
Our clients now have on-demand access to custom reporting that details:
Portfolio Level Allocations (long and short)
Period Exposure (Gross/Net over the month)
Attribution of Return by Allocation
Portfolio Allocations – Investors have a view of the Fund’s allocations as of the last day of the month. Investors are thus able to understand the underlying investments that they are exposed to and the associated directional risk. From the chart below, you can see that this hypothetical Fund’s largest position at month-end was Bitcoin (38.8%).
Return Attribution – Another report allows investors to understand the drivers of performance over the month. In this hypothetical period the demonstration Fund returned 6.8% which was largely driven by long exposure to BTC and LTC.
Period Exposure (Gross/Net over the month) – The hypothetical Fund is actively traded and takes both long and short exposure, as well as harvesting yield through lending stablecoins. The graph below demonstrates that the hypothetical Fund was in long positions throughout the beginning of the month and began adding short and yield exposure in the third week.
We have aimed to make the reporting clear and easy to understand, while also providing sophisticated information. Our intention is to provide clients with relevant and timely data to facilitate their understanding of the investment so that they can appreciate how the investment fits within their overall portfolio.
In the frontier world of digital assets, investment managers must deliver more than superior risk-adjusted returns, they must also deliver trust and transparency to their investors
To learn more about Strix Leviathan and our approach to investing in digital assets, please reach out to firstname.lastname@example.org