DigiMax To Acquire 80% Stake In Crypto Hedge Fund
DigiMax Global (CSE: DIGI) has entered into a letter of intent to acquire the rights to a global crypto currency hedge fund. The fund, known as Barberton Funds SPC, is to be acquired from Scotstone Group in concert with Seneca House Fund Management.
The fund is effectively focused solely on the crypto currency space, where it provides a “fully systematic long/short active investment into a basket of cryptocurrencies capitalizing on crypto volatility and powered by proprietary trading algorithms.” The fund is to utilize DigiMax’s CryptoDivine.ai trading tool as the basis for much of its investments.
Effectively, the fund is to offer what is deemed as alternative investments to high net-worth individuals as well as institutions. The company expects minimal cannibalization from its current subscriber base as a result of the US$100,000 minimum investment in the fund. Furthermore, the fund reportedly has all required third-party service providers in place.
Portfolio management of the fund is set to be conducted by Seneca House Fund, with the fund expected to be open by August 2021, saving DigiMax roughly 12 to 18 months had they started the process themselves. DigiMax is set to sell its exempt market dealer as a means of avoiding any potential conflicts of interest.
The fund is to be acquired at a cost of US$125,000, and the covering of past and upcoming filing and legal fees, as well as certain oncoming development fees. The transaction will see Seneca House retain a 20% interest in the fund, with DigiMax having the option to purchase an additional 15% for 18 months, at the higher of $1.0 million, or 2% of assets under management. The transaction is to close before April 30, 2021, with the offering of units to begin by August 2021.
DigiMax Global last traded at $0.27 on the CSE.
FULL DISCLOSURE: DigiMax Global Solutions is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover DigiMax Global Solutions on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
