Hedge fund Arca doubles sales of its flagship fund | Paragon Alpha | Paragon Alpha

Despite LUNA exposure, crypto hedge fund Arca nearly doubles sales for its flagship fund

By Matea Gucec

Even after disclosing to investors that it had exposure to the Terra ecosystem, which collapsed in May, Arca, a cryptocurrency hedge fund with about $500 million in assets under management, nearly doubled sales of its flagship fund in a year.

The Arca Digital Assets Fund, which invests in the tokens of cryptocurrency companies, reported this week in a filing with the U.S. Securities and Exchange Commission that as of Oct. 24, it had raised $191.7 million, up from $109 million at the start of October 2021. Commission for Securities and Exchange. Between the filings, the fund's investor base grew from 333 to 576, and it is still accepting new investors.

Although some companies choose to publish the fund's assets under management, which would represent performance, instead of the amount of money investors have provided the fund - or sales - Arca often employed the SEC filing type Arca used. Arca's Investment Adviser registration records show that as of June 30, the Arca Digital Assets Fund had a gross asset value of $234.3 million.

Arca disclosed exposure to Terra's native token LUNA and its stablecoin terraUSD in an investment letter distributed in May. (UST). In a sudden collapse, the algorithmic stablecoin lost its peg to the dollar, taking LUNA with it. Arca claimed that at the time of the letter, Digital Assets held LUNA, which continued to forecast a rebound for the Terra tokens.

According to the company's website, Arca oversees three other funds built on the foundation of the Digital Assets vehicle: The actively managed Arca Digital Yield included early-stage venture capital-focused Arca Endeavor, Arca NFT for non-fungible token exposure, and Terra's UST as a fundamental asset. At the end of June, the funds' respective gross asset values were $53 million, $10 million, and $24.4 million.


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