Asset management firm Schroders has purchased a minority stake in New York-based cryptocurrency company Forteus as part of developing research in the blockchain sector.
In the deal, Schroders stated that Forteus, the fund management arm of Swiss-based Numeus Group, will be tasked with offering different investment solutions like yield generation, managing thematic portfolios and tokenisation, Institutional Asset Manager reported on July 25.
The company noted its plans to harness the benefits that blockchain can bring to the asset management industry while developing its tokenisation strategy.
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Blockchain’s role in asset management
According to Schroders CEO Peter Harrison, the firm’s venture into the blockchain space is driven by the technology’s potential. According to Harrison:
“It not only has the potential to transform the efficiency of existing solutions but will drive the democratisation of private assets; it represents a new frontier of technological and financial innovation.”
The investment comes at a period when the crypto sector is experiencing a sustained bear market that has seen most assets significantly lose their value, with related businesses struggling to remain afloat. Notably, the correction has emerged amid monetary policy tightening by central banks attempting to curb the skyrocketing inflation.
Lessons from the crypto sector
In a recent commentary, Harrison indicated that the crash in crypto prices should not be a concern, but the market needs to focus on the technology powering digital assets.
He noted that the traditional finance sector needs to pick necessary lessons from the crypto space, stressing that the industry has managed to market itself despite challenges with regulations and high volatility.
“Ironically, blockchain, the technology that underpins cryptocurrencies, could catalyse change in the traditional investment industry. It is probably why we may have already passed peak fund,” Harrison said.
Indeed, the market meltdown has resulted in several crypto companies like lending platform Celsius resorting to filing for bankruptcy after being unable to sustain its business, citing liquidity issues.