Description

3iQ is the largest Canadian digital asset manager with approximately $620m in AUM (see investment memo below).

Delphi Ventures has secured a $200k allocation at a $30m valuation for this SPV opportunity.

Key Points

  • Investing in a digital asset manager is a bet on increased capital flows (both passive & active), widespread adoption among investment managers, and the dearth of compliant products on the market. 
  • The general investing public has been underserved by a lack of appropriate investment vehicles of which advisors and investment professionals can allocate client funds; 3iQ aims to tackle these concerns head-on.
  • In late 2019, 3iQ’s Bitcoin Fund (QBTC) was approved to become the first regulated, major exchange listed, secure and vaulted bitcoin fund in the world.
  • 3iQ’s funds are prospectus-based; the Bitcoin and Ether funds both conducted initial public offerings (IPO) and trade on the Toronto Stock Exchange (TSX).
  • 3iQ currently has ~$620M in AUM across its Bitcoin and Ether funds, the latter of which just completed its initial public offering on December 10th, 2020.
  • More mature asset management firms typically get acquired for 1.5-2.0% of AUM. Hypothetically, assuming 3iQ reaches $10B in AUM, such size could warrant a $200M+ valuation (~7x ROI).

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