For investors intrigued by the potential of cryptocurrencies but hesitant to navigate the complexities of self-custody, professional fund management may offer a compelling alternative. Managing private keys, securing wallets, understanding seed phrases, and staying vigilant against security threats can be overwhelming—even for tech-savvy individuals. This is where professionally managed crypto funds step in, offering access to digital assets without the operational burden.
Enterprises like MHC Digital Group are emerging as key players in this space, providing structured investment vehicles tailored for sophisticated investors seeking exposure to blockchain, crypto, and Web3 technologies—without the need to personally manage digital wallets or private keys.
Why Consider a Managed Crypto Fund?
The crypto market operates 24/7, with rapid price swings that demand constant attention. While decentralization and self-sovereignty remain core tenets of the industry (“not your keys, not your coins”), many investors prefer to outsource the technical and strategic challenges to experienced professionals.
Managed crypto funds combine traditional investment discipline with deep blockchain expertise. These funds are particularly appealing to:
- High-net-worth individuals
- Family offices
- Investors seeking diversified exposure across digital assets
- Those wary of cybersecurity risks tied to self-custody
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Understanding MHC Digital’s Fund Offerings
Founded in early 2021 by Australian entrepreneur and venture capitalist Mark Carnegie, MHC Digital Group launched two actively managed funds initially operated with personal capital before opening to select private investors. The firm targets experienced investors—defined as those with an annual income of at least AUD $250,000 or net assets of $2.5 million (including home and pension).
It's important to note: these are unregulated products under standard retail protections. As such, MHC Digital isn’t required to issue prospectuses, product disclosure statements, or target market determinations. Interested parties must conduct thorough due diligence.
Digital Asset Fund (DAF)
The Digital Asset Fund (DAF) blends active fund management with specialized knowledge of the digital ecosystem. It aims to capture opportunities across both on-chain and off-chain markets through a hybrid approach.
Investment Strategy
- Invests in digital assets and protocols via centralized exchanges (CEX), decentralized exchanges (DEX), and over-the-counter (OTC) providers.
- Allocates capital to traditional financial instruments linked to blockchain themes (e.g., equity stakes in Web3 companies or venture-style investments).
Portfolio Allocation
- 40–75%: Large-cap cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH)
- 20–60%: Stablecoins, staking strategies, fixed income, and market-neutral trades
- 0–20%: Alternative opportunities (e.g., early-stage tokens, NFT-related ventures)
Assets are stored using a mix of cold storage, multi-signature wallets, staking pools, exchange wallets, and approved third-party custodians—balancing security and yield generation.
Digital Market Neutral Fund (MNF)
The Market Neutral Fund (MNF) is designed for investors seeking consistent returns regardless of broader market trends. It focuses on exploiting inefficiencies within the crypto ecosystem rather than betting on directional price movements.
Key Strategies
- Arbitrage across liquidity sources, interest rate curves, and exchanges
- Long/short positions using spot, perpetual swaps, futures, options, and structured products
- Fixed-income plays including on-chain yield farming and bonds issued by digital asset firms
Unlike DAF, MNF does not follow a fixed allocation model. Instead, it dynamically adjusts exposures to maintain a non-directional profile—ideal for portfolio diversification and risk mitigation.
“The goal is asymmetric risk exposure—capturing upside while minimizing correlation to volatile crypto markets.”
Minimum Investment & Fee Structure
Both funds require a minimum investment of AUD $50,000, aligning them with high-net-worth and institutional-grade investors.
| Fund | Management Fee | Performance Fee | Hurdle Rate |
|---|---|---|---|
| DAF | 2% per annum (quarterly) | 25% of net returns | 10% IRR |
| MNF | 2% per annum (quarterly) | 20% of net returns | 6% IRR |
These hurdle rates ensure managers only earn performance fees when investor returns exceed predefined thresholds—aligning incentives between fund managers and investors.
Performance Highlights
Digital Asset Fund (DAF)
When compared to the S&P Cryptocurrency LargeCap Index (in AUD), the DAF has significantly outperformed its benchmark—especially during the turbulent 2021–2022 period. While the index posted a -34% return over the same timeframe, DAF achieved positive absolute returns since inception.
Recent performance has been buoyed by the recovery of BTC and ETH prices from their 2022 lows, contributing to modest outperformance over the past six months.
Digital Market Neutral Fund (MNF)
As an absolute-return vehicle, MNF doesn’t benchmark against indices. Since its mid-2021 launch, it has delivered a cumulative return of 16.88%, surpassing DAF over the same horizon.
However, its recent performance has been more muted—likely due to lower direct exposure to major cryptocurrencies—demonstrating its decoupled nature from broader market rallies.
Core Benefits of Outsourcing Crypto Management
Investors turn to managed funds not just for returns—but for peace of mind. Key advantages include:
- Reduced operational burden: No need to manage private keys or worry about wallet security.
- Professional risk management: Access to hedging, arbitrage, and diversified strategies.
- Institutional-grade custody: Assets held via secure multi-sig and third-party custodians.
- Diversified exposure: Blend of large-cap cryptos, yield strategies, and alternative plays.
- Time efficiency: 24/7 market monitoring handled by experts.
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Frequently Asked Questions (FAQ)
Q: What does “not your keys, not your coins” mean—and does it apply here?
A: This phrase emphasizes the importance of controlling your private keys. In managed funds like MHC’s, investors entrust custody to professionals. While you don’t hold keys directly, you gain access through regulated legal structures and secure custodial solutions.
Q: Are these funds available to retail investors?
A: No. They’re currently limited to sophisticated investors meeting specific income or net worth thresholds (AUD $250K income or $2.5M net assets).
Q: How are crypto assets secured in these funds?
A: Through a combination of cold storage, multi-signature wallets, staking providers, and approved third-party custodians—reducing single points of failure.
Q: Can I withdraw my investment at any time?
A: Liquidity terms vary; most managed funds have lock-up periods or redemption windows. Check the fund’s information memorandum for details.
Q: Is past performance indicative of future results?
A: Not necessarily. While historical data shows strong risk-adjusted returns, crypto markets are highly volatile. Always assess current market conditions and fund strategy alignment.
Q: How do performance fees work?
A: Managers earn a percentage of profits only after exceeding a hurdle rate (e.g., 10% IRR for DAF). This ensures alignment with investor success.
Final Thoughts: Is Professional Crypto Management Right for You?
MHC Digital Group represents a growing trend: institutional-quality crypto investment vehicles that bridge innovation with financial rigor. For investors who value expertise over direct control—or simply want to avoid the stress of self-custody—these funds offer a viable path into digital assets.
That said, all investments carry risk—especially in emerging markets like crypto. Due diligence remains essential. Evaluate each fund’s strategy, fee structure, transparency level, and alignment with your long-term goals.
👉 Explore advanced crypto investment models used by professional fund managers
Whether you're diversifying an existing portfolio or allocating capital to next-generation technologies, delegating your crypto exposure to skilled managers could be a smart move—one that balances opportunity with operational simplicity.