Fund Overview
The Fund’s investment objective is capital appreciation, which it generally seeks to achieve by investing in digital assets. The Fund utilizes a risk-based approach to digital asset allocation with the flexibility to adjust for adverse market conditions. The Fund will earn additional yield through staking solutions and digital asset lending, including through DeFi protocols. The Fund may also invest in securities issued by digital asset companies.
- Blockchain and web3 represent long-term disruptive forces within the broader economy, beyond just technology and finance.
- Traditional valuation methodologies can be employed to value digital assets projects, providing a framework for portfolio construction and risk management.
- Active process is thesis-driven, employing both long-biased token holdings and yield-generation.
Fund Details
Inception: June 2022
Management Fee: 2.00%
Performance Fee: 20% (subject to high watermark)
Min. Investment: $1,000,000
Additional Investment: $250,000
Investor Type: Qualified Purchasers
Subscriptions: Monthly
Redemptions: Quarterly (with 30 days notice)*
Gate: Fund-Level Gate
IMPORTANT RISKS
An investment in the Fund involves a significant degree of risk, and, therefore, should be undertaken only by investors capable of evaluating the risks of the Fund and bearing such risks. In addition, there are significant actual and potential conflicts of interests that may arise in connection with the Fund that investors should be aware of. The existence of any risk or an actual conflict may have an adverse impact on the performance of the Fund and, thus, the return to Limited Partners. Prospective investors in the Fund should carefully consider the risk factors in connection with an investment in the Fund and should consult their own legal, tax and financial advisors as to all of these risks and an investment in the Fund generally. The Interests are suitable investments only for sophisticated investors for whom an investment in the Fund does not constitute a complete investment program and who fully understand, and are willing to assume, and have the financial resources to withstand, the risks involved in the Fund's specialized investment program and to bear the potential loss of their entire investment in the Interests. Please see important definitions and disclosures below.
The General Partner may suspend or limit the right of all Limited Partners to make withdrawals under certain circumstances as laid out in the Private Placement Memorandum.
Important Definitions & Disclosures
* Redemptions may be suspended under certain circumstances.
The VanEck Digital Assets Alpha Fund (the “Fund”) is not an investment company registered under the Investment Company Act of 1940, and therefore is not subject to the same regulatory requirements as mutual funds or ETFs registered under the Investment Company Act of 1940. While the Fund may trade commodity futures, commodity options contracts and other CFTC Regulated Products, the general partner intends to rely on the CFTC Rule 4.13(a)(3) exemption from registration as a Commodity Pool Operator (“CPO) and at all times the Fund will meet (i) trading limitations, (ii) investor suitability requirements and (iii) offering and marketing restrictions. Before making an investment decision, you should carefully consider the risk factors and other information included in the Private Placement Memorandum.
The Fund is available to Qualified Purchasers Only. Please carefully read the Private Placement Memorandum before investing. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. There is no guarantee the Fund will achieve its investment objective and investors may lose their entire investment. The Fund is not suitable for all investors. Past performance is not a guarantee of future results.
Your individual performance may be different and will be reflected in your monthly investor statement. It is important to rely on the monthly investor statement that you receive from the fund’s Administrator, as the statement will indicate your individual performance. An individual investor’s performance may differ, perhaps materially, from the performance results set forth herein due to a number of factors, including (a) participation in new issues, (b) timing of individual contributions/ subscriptions and withdrawals/redemptions, (c) any accumulated loss carryforwards and (d) different expenses, fees and other charges paid by certain investors.
The Fund’s investment program is speculative and entails substantial risks. There can be no assurance that the Fund’s investment objective will be achieved.
An investment in the Fund is subject to risks which include, among others, regulatory, general investment and trading, opaque spot market, digital assets, digital asset exchanges, investing through DEXes, stablecoin, OTC transactions, valuation and liquidity, cryptocurrencies lending, digital asset lending and borrowing, DeFi lending of digital assets, digital asset lending programs offered by certain CeFi and DeFi exchanges, rebasing of digital assets, credit, credit market illiquidity, third party wallet providers, loss of private key, volatility and speculative nature of digital assets trading, digital asset network protocols and software, digital asset network malicious actors, forks and airdrops, digital asset miners ceasing operations, cybersecurity, computer malware and viruses, data loss, incorrect transfer of digital assets, initial coin/pre-sale initial coin offering, synthetic investments, options, futures, forwards, lack of blockchain company operating history, blockchain company failure, custody of fund assets, short selling, leverage, limited diversification, non-U.S. securities, and counterparty risks. Please note that this is not an exhaustive list of risks pertaining to the Fund. Please read carefully the PPM for a complete list of potential risks.
The Fund’s investment objective is to provide capital appreciation through investing primarily in digital assets such as cryptocurrencies, protocols, digital currencies, cryptocommodities, digital currency networks, digital coins, altcoins, cryptocurrency platforms, decentralized application tokens and protocol tokens, app coins, blockchain-based assets, cryptoassets and other cryptofinance and digital assets and instruments that are based on or related to blockchain, distributed ledger, directed acyclic graph or similar technologies that currently exist or may exist in the future (collectively, “Digital Assets”).
The Investment Manager utilizes a risk-based approach to Digital Asset allocation with the aim of providing the flexibility to adjust in adverse market conditions. The Investment Manager seeks to invest the Fund’s assets in approximately 5 to 30 Digital Assets with high future potential value relative to such Digital Assets’ current valuations and generally with market capitalizations in excess of $100 million. The Investment Manager will seek to analyze Digital Assets based on a variety of factors, including, but not limited to, use case, future adoption, existing partner firms and future partner prospects. The Fund also intends to seek additional yield through staking solutions and Digital Asset lending, including through decentralized finance (“DeFi”) protocols. The Fund may also invest in public and private securities issued by Digital Asset companies (collectively, “Blockchain Companies” and such investments, “Blockchain Company Investments”).
With the goal of limiting potential losses associated with adverse market conditions, excessively high valuations and drawdowns, the Investment Manager will adjust the Fund’s Digital Asset allocation, which will generally range from 70% to 90% of the Fund’s assets. The Fund’s remaining assets will generally be used to generate yield.
Investments in digital assets and Web3 companies are highly speculative and involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility and limited liquidity, including but not limited to, inability to liquidate a position; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets.
Digital asset prices are highly volatile, and the value of digital assets, and Web3 companies, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss of your entire principal investment.
Digital assets are not generally backed or supported by any government or central bank and are not covered by FDIC or SIPC insurance. Accounts at digital asset custodians and exchanges are not protected by SPIC and are not FDIC insured. Furthermore, markets and exchanges for digital assets are not regulated with the same controls or customer protections available in traditional equity, option, futures, or foreign exchange investing.
Digital assets include, but are not limited to, cryptocurrencies, tokens, NFTs, assets stored or created using blockchain technology, and other Web3 products.
Web3 companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies.
VANECK ABSOLUTE RETURN ADVISERS CORPORATION (‘VEARA”), THE INVESTMENT MANAGER OF THE FUND, IS A MEMBER OF NFA AND IS SUBJECT TO NFA’S REGULATORY OVERSIGHT AND EXAMINATIONS. VEARA HAS ENGAGED OR MAY ENGAGE IN UNDERLYING OR SPOT VIRTUAL CURRENCY TRANSACTIONS IN THE FUND. ALTHOUGH NFA HAS JURISDICTION OVER VEARA, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY FOR UNDERLYING OR SPOT MARKET VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS. YOU SHOULD ALSO BE AWARE THAT GIVEN CERTAIN MATERIAL CHARACTERISTICS OF THESE PRODUCTS, INCLUDING LACK OF A CENTRALIZED PRICING SOURCE AND THE OPAQUE NATURE OF THE VIRTUAL CURRENCY MARKET, THERE CURRENTLY IS NO SOUND OR ACCEPTABLE PRACTICE FOR NFA TO ADEQUATELY VERIFY THE OWNERSHIP AND CONTROL OF A VIRTUAL CURRENCY OR THE VALUATION ATTRIBUTED TO A VIRTUAL CURRENCY BY VEARA.
Information provided by Van Eck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.
© Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.