Tag: neuberger berman

Neuberger Berman Wins SEC Approval to Invest 5% Commodities Fund in Bitcoin Futures

New York-based Neuberger Berman asset management firm received the US SEC’s greenlight to invest up to 5% of its assets in Bitcoin futures.

Neuberger can invest up to 5% of its $164 million Commodity Strategy Fund for Investment in Bitcoin products, such as Bitcoin futures and Canadian Bitcoin exchange-traded funds.

According to its regulatory filing with the US Securities and Exchange Commission (SEC), Neuberger, which manages more than $402 billion in client assets as of March 31, 2021, stated that its application has been approved effective immediately, and will enable its Commodity  Strategy Fund to invest in the $8.2 million from its commodities fund in Bitcoin products, either directly or through a “wholly-owned subsidiary” as it does with other futures.

In the United States, Neuberger’s futures will take place on exchanges regulated by the Commodity Futures Trading Commission (CFTC), such as the Chicago Mercantile Exchange (CME). Yet, due to the lack of Bitcoin-related ETFs in the US, Neuberger has decided to trade on Canadian Bitcoin ETFs.

On August 11, Neuberger filed the initial application seeking approval from the SEC to add Bitcoin and Ethereum derivatives to its fund’s investment options. However, in an amended regulatory filing with the SEC on August 20, Neuberger stated that its $164 million commodities mutual fund could invest up to $5% of its assets for Bitcoin investments to gain indirect exposure to Bitcoin. The later filing supplement stated that Neuberger replaced the original one, and therefore Ethereum derivatives no longer seem to be part of the firm’s investment options.

The report shows that Neuberger’s motivation toward cryptocurrency is based on the need to grow the fund’s use as an inflation hedge. Furthermore, the US investment firm also believes that the price trends could serve as another potential source of revenue.

Worries Over Ether ETF Withdrawals

Neuberger Berman is not the only firm that recently pulled back its Ethereum futures application.

Multiple investment firms have recently withdrawn their applications for Ethereum futures ETFs, which has been a concern to users in the cryptocurrency community. 

Last week, investment firms ProShares and VanEck withdrew their applications with the SEC for approval for Ethereum futures ETFs just two days after filing them.

The senior ETF Analyst for Bloomberg, Eric Balchunas, explained the abrupt withdrawals could imply the SEC spoke to both firms and informed them that they were unlikely to approve an ETF futures fund.

However, Balchunas stated that as long as the industry sees the Ether EFTs ejected, that sounds good news for Bitcoin ETFs. It can be a way of saying that the SEC may start considering accepting Bitcoin ETFs first shortly.

Earlier this month, SEC chairman Gary Gensler signalled that the regulator could be more open to ETFs based on futures rather than cryptocurrencies themselves. Such remarks prompted numerous firms to apply for crypto futures ETFs, including Bitcoin futures ETFs and Ethereum futures ETFs.

BlockFi, Neuberger Berman Partner to Offer Crypto Asset Product Suite, Including ETFs

Crypto lending company BlockFi has partnered with New York-based private investment management firm Neuberger Berman to create a new business entity that would develop and offer a new cryptocurrency management product, including Exchange-Traded Funds.

BlockFi announced on Monday, October 25, that the new joint business entity called ‘BlockFi nb’ expects to “launch crypto asset management products, including ETFs and other traditional structures,” that would give investors exposure to cryptocurrencies in their brokerage accounts.

BlockFi nb president, Greg Collett, talked about the development and said: “We are witnessing a significant shift in investor sentiment towards digital assets, and we believe that digital assets should be considered in modern portfolios.”

Through the launch of BlockFi nb, clients will have an asset management product suite that offers access to digital assets and services from experts in investment management and cryptocurrency, Collett said.

According to the two companies, the partnership will combine Neuberger Berman’s suite of crypto strategies with BlockFi’s retail and institutional cryptocurrency solutions. In other words, the product suite would include ETFs and other traditional structures. The crypto products will exist alongside BlockFi’s retail and institutional crypto solutions and Neuberger Berman’s actively managed crypto strategies suite.

Collett further stated that “we think this combination will help us to improve on products currently in the market so that we can give investors cost-effective and convenient access to the performance of digital assets from their brokerage accounts.”

BlockFi offers financial services such as interest-earning accounts and USD loans secured with cryptocurrencies for businesses and individuals across the US and worldwide.

Meanwhile, Neuberger Berman is an 82-year-old private investment management firm that manages $437 billion in client assets as of September 30. The company operates a range of fixed income, equity, hedge fund, and private equity strategies on behalf of individual investors, institutions, and advisors worldwide.

Crypto ETFs Demand Rising

The new partnership by BlockFi and Neuberger Berman comes at a time when cryptocurrency ETFs continue to gain popularity.

As reported by Blockchain.News, the first US Bitcoin ETF began trading on Tuesday, October 19, making the most widely traded cryptocurrency available to most investors with a brokerage account.

ProShares launched its Bitcoin futures exchange-traded fund last week, allowing investors to purchase and sell the assets outside of cryptocurrency exchanges.

Last week marked a milestone for cryptocurrency as investors began trading the ProShares Bitcoin futures ETF, exceeding any other ETF launches, and another, the Valkyrie Bitcoin strategy ETF, started trading on Friday on the public stock exchange market.

With ProShares and Valkyrie already trading their Bitcoin futures ETFs, others are expected to follow as the US Securities and Exchange Commission (SEC) considers other applications.

On October 8, BlockFi applied with the SEC to provide the BlockFi strategy ETF, an actively managed fund that would invest in Bitcoin futures contracts.

In August, Neuberger Berman began providing clients exposure to Bitcoin and other crypto-assets through crypto derivatives like Bitcoin futures and Ether futures, as well as investments in Bitcoin trusts and ETFs to gain indirect exposure to Bitcoin.

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