Laurenz Apiarius is Managing General Partner at Blockwall, the first German BaFin-registered fund manager to give its investors access to the development of Blockchain technologies. We talked to him about his personal background, the product offered by Blockwall and his view on crypto currencies.
Were you already involved with the Bitcoin evolution before this project and what was your attitude in this regard?
The topic of crypto currencies has been with my partners and me for several years. Initially it was more of a game with “digital money”, but this changed quite quickly after we understood what it was all about and what incredible potential is hidden behind Distributed Ledger Technologies (DLTs). Since then, it has been difficult to find other Bitcoin evolution issues that have a similarly disruptive effect.
What were the reasons for setting up a closed fund instead of an open fund?
Our fund is a bridge through which professional investors can participate in the development of these technologies. Since the technologies are still in an absolute early phase, the prices for the crypto currencies are still very speculatively driven and therefore not always comprehensible and volatile. It was therefore a compelling approach for us that the fund should be closed in order to protect our investors from these speculatively driven market fluctuations and thus be able to focus on technological development.
Which investor group is your fund targeting? How high is the minimum deposit?
Our investor groups are primarily HNWIs, family offices and institutional investors who have identified DLT/Blockchain as an interesting addition to their portfolio strategy. The minimum investment in our first fund “Blockwall Capital I” was EUR 200,000, which was in line with our regulatory requirements.
Does your fund invest directly in tokens or are derivatives used to replicate prices?
The value added in the area of decentralised technologies is almost exclusively represented by the respective token, which is why we invest exclusively and directly in such tokens. Furthermore, we make investments exclusively without outside capital. We cover the entire investment cycle of a token – from equity to pre-ICO/ICOs to already tradable assets. The latter – the liquid part of the market – is our clear investment focus.
How is secure token storage ensured?
The issue of safekeeping is particularly important to us, which is why we only use solutions that are internationally recognised and “best practice”. We follow developments on this key building block with great care. For each of our assets, there is a safekeeping system that is optimal and secure for this particular value.
What criteria are used to select the crypto currencies? What diversification approach do you have?
The technology is still at an early stage of development and holds great opportunities as well as risks. From today’s perspective, we see the greatest potential in the technological basis, which will be relevant for the DLT ecosystem in the long term. These infrastructure technologies will enable the innovative and new business models on the blockchain and thus lay the foundation for further applications.
Most investors in this market still invest too much from the “belly”. Very few people actually read a white paper or try to analyze and evaluate the business case behind a token. For us, an investment without a fundamental analysis is out of the question. Here we rely on a self-developed valuation matrix and valuation model, which we continuously develop further. Our asset allocation is based on qualitative and quantitative due diligence.
Are further funds planned for the future?
Definitely. Within the framework of fundraising, we came across many interested parties for whom a kind of proof of concept was still missing at the time. With our current fund, we have now created the infrastructure and back office that also meet the standards of institutional investors. We are therefore currently aiming to close a second fund before the end of this year.