Canadian digital asset investment manager 3iQ and its counterpart from the United Arab Emirates, Further Asset Management, have jointly launched a multi-strategy digital hedge fund that promises double-digit returns and has attracted US$100 million of investments.
The Further x 3iQ Alpha Digital fund offers risk-managed exposure to digital assets, including a dedicated bitcoin share class, and drew investments from institutions, family offices and sovereign investors, the companies say in a joint statement on December 3.
A Bitcoin share class is seen as more secure by institutional investors because it replaces fragile self-custody and exchange risk with regulated fund structures, independent custody, audited valuations and enforceable legal ownership.
Pascal St-Jean, president and chief executive officer of 3iQ, tells Asia Asset Management that the hedge fund aims to achieve 12%-15% returns annually.
According to St-Jean, the fund addresses core challenges that institutional investors face when accessing digital assets, and provides a “secure and efficient way to allocate within a framework that meets the highest standards of institutional due diligence”.
“We believe this investment solution represents a true evolution in the market, empowering institutions and family offices to confidently pursue double-digit potential returns through a disciplined, risk-managed approach,” he says.
Unlike many digital asset funds that generate yield by lending to crypto counterparties, OTC desks or through leveraged derivatives strategies, 3iQ relies on an institutional financing model that focuses on securing low borrowing costs through high-quality collateral and established counterparties.
The approach mirrors traditional hedge fund balance-sheet optimisation rather than DeFi-style yield farming. The firm avoids decentralised finance protocols, which its management views as capital inefficient for institutions due to low loan-to-value ratios, high and volatile carry costs, and unquantifiable smart-contract risk.
Toronto-based 3iQ manages over $3.5 billion of assets.
