Trovio Capital Management (TCM) has announced the creation of the Digital Asset Income Fund for investing in stablecoin based decentralized finance (DeFi) protocols.
TCM is a subsidiary of The Trovio Group based in Australia.
The Fund is said to be institutional-grade to enable a safe investment into DeFi firms.
The Fund aims to raise $US 40 million before the end of this year, and $US 150 million towards the end of next year. It has already started buying stablecoins and says it will pledge these across DeFi liquidity pools.
The Digital Asset Income Fund will target a 15%-20% p.a. return on investment by sourcing the highest-yielding stablecoin DeFi protocols. The portfolio is expected to be regularly rebalanced to maintain a targeted 90% stablecoin threshold.
The fund also seeks to generate alpha through a discretionary 10% allocation to non-stablecoin pools when suitably attractive opportunities are identified.
The company believes that attractive yields and lower risk make the Digital Asset Income Fund an ideal avenue for institutional investors looking to dip their toes into the rapidly developing DeFi sector.
Jon Deane, CEO at The Trovio Group, said that DeFi represents a complete transformation in the way investment firms and individuals can generate returns.
“Providing institutions with access to exceptional yields available through investments in DeFi, while also prudently managing downside risks, is key to fostering institutional development of the sector.”
Deane added that they believe Bitcoin is key to achieving clean energy in the future but the transition will take some time:
“Digital asset mining is definitely trending towards renewable sources, but until we reach the point where 100% of the mining is on sustainable energy sources, TCM is fully committed to offsetting the carbon footprint of the Digital Asset Income Fund.”