The platform reduces the costs of investing by up to 20 times.
Digital asset management platform DEXTF hopes to revolutionise the industry by reducing the cost of opening a hedge fund, and paving the way for the rise of non-traditional asset classes such as wine, art, and IP rights.
“Today if you are a new asset manager, you need at least $100-200m in assets under management in order to be viable. There are entire asset classes that are just the preserve of either ultra-high net worth individuals (UHNWI) or institution investors because they require high nominal investment amounts,” said co-founder and President Mario Aquino.
DEXTF’s platform halves the traditional custody, compliance, and back-office costs, and can even reduce expenditure by as much as 20 times. It leverages distributed ledger technology (DLT), which tokenizes both traditional and non-traditional assets.
In turn, these assets can be made available in smaller amounts rather than the high-cost investments available traditionally.
Using the platform is easy, and akin to simply filling out a Google sheet: a fund manager can easily create a hedge fund and specify the assets which the fund will carry. On the other side, an investor can sign up for a fund with just a few clicks and track where their investments are going.
This means that investors using DEXTF’s platform no longer need to transfer ownership of their assets to a third party when entering the hedge fund scene, thus allowing for more accountability and transparency, and making investments safer.
“The asset management industry still largely relies on legacy infrastructure that was built over half a century ago and is highly inefficient, with multiple layers of intermediaries, agents, and in some cases archaic systems that still rely on paper and faxes,” noted Aquino.
Aquino hopes that one day, through DEXTF, anyone can easily become an asset manager once they’ve secured the necessary permits to do so, without worrying about funding.
In November, the company raised $639,110 (US$460,000) in its seed round, led by LuneX Ventures and SGInnovate. The company plans to use the funding for the development and launch of their alpha product.
“Digital assets remain an area of sustained interest for institutional investors and asset managers, yet many see the current investment infrastructure as inadequate. We see a lot of potential in the development of this proprietary infrastructure and protocol by DEXTF, which could provide a solution to a significant industry problem with great market opportunities,” said Pang Heng Soon, head of venture building at SGInnovate.