The Apollo Capital Fund
The Apollo Capital Fund is an award-winning multi-strategy fund that invests in the crypto assets that are powering a new financial infrastructure. The Apollo Capital Fund is led by a team with a rare combination of traditional funds management and crypto asset experience.
If you are new to crypto assets and would benefit from an explanation of the basics, please read our e-book Crypto Assets Explained: Understanding the Basics of a New Asset Class.
Why Crypto Assets
Crypto assets act as a hedge against macroeconomic uncertainty
Money as we know it has only existed for 50 years. For the thousands of years prior, money was always tied to scarce resources such as gold and other commodities.
The global economy has amassed record levels of debt. Governmental response around the world has been to print more and more money. Historically, this has resulted in a reduction in value of the existing money.
The response from central banks around the world to print more money is an experiment.
The next financial crisis may drive significant crypto adoption given its lack of correlation with existing assets and its seizure and inflation resistant properties.
Open and permissionless innovation on a global scale
Crypto assets leverage the technological possibilities of the digital age to create decentralised applications that aim to empower the individual and take away control from third party intermediaries.
Decentralised Finance (DeFi) represents the first time in human history that we have open and permissionless innovation in finance on a global scale.
Over the coming years, blockchain developers will continue to build a more efficient, fair and open financial system. We believe that there will be many opportunities to participate in projects that will be the first of their kind and shape the future financial system.
Bitcoin will act as a pillar of value to this new and modern financial system that is fundamentally superior to the slower moving legacy financial system.
The fund’s strategies include:
- Core Positions – actively managed core positions in key verticals with long-term potential
- Early Stage Projects – select investments in high quality, early stage projects
- Opportunistic trading/special situations – Strategies include event based trades and risk arbitrage.
- Exposure to market neutral strategies though The Apollo Capital Opportunities Fund. An absolute return fund designed to capture price-insensitive opportunities in inefficient crypto markets.
We believe the lion’s share of value will be created in crypto assets running core blockchains and middleware infrastructure. We seek a balanced weighting between layer 1 blockchains and middleware.
- We see a select number of blockchains as the core infrastructure of the next generation of computing infrastructure.
Examples include Bitcoin and Ethereum.
- Middleware infrastructure are built on top of blockchains. Our middleware assets portfolio is focused on Decentralised Finance (DeFi), this infrastructure is currently built mostly on Ethereum.
- As innovation occurs and applications are built on top of these building blocks, demand for crypto assets will increase.
The Synthetix Network Token (SNX) is a core position in the portfolio. Synthetix is a protocol that enables trading of a range of synthetic assets such as crypto, foreign exchange, commodities and equities. Synthetic assets refer to assets that are artificially created. Users do not trade the underlying assets, rather a synthetic equivalent that mimics the performance of the asset.
We believe making these assets available on crypto rails is one of the largest market opportunities in DeFi. The deep liquidity of these synthetic assets will power a new era of financial tools not possible without blockchain technology.
Synthetic assets are created by staking SNX. By staking SNX, the Fund receives exchange fee rewards and staking rewards. Staking SNX offers an APY (annualised percentage yield) of around 20 – 30%. The Apollo Capital fund has staked SNX for a considerable period and first acquired SNX tokens at $0.5.
We believe financial applications are the most ripe for disruption by blockchain technology. Financial applications are known as Decentralised Financial or DeFi. DeFi related crypto assets have found an early product market fit and strongly contributed to the Fund’s outperformance. These assets have a native ‘cash-flow’ and thus an intrinsic value.
Mitigation Strategy By having a strong understanding of the fundamental and economic value of crypto assets, we are able to properly understand the valuations and price action of crypto assets. Despite short term volatility, over the longer term, we believe our core positions will continue to accrue value. Diversification and position sizing are key risk management tools for this strategy.
Smart Contract Risk
Some of our core positions may involve locking funds into smart contracts for additional yield. Smart contract risk is the risk that a bug or exploit by attackers will result in a loss of funds. To mitigate this risk we critically evaluate the security of any smart contract and make sure that the project is sufficiently audited.
The Apollo Capital Opportunities Fund
The Apollo Capital Opportunities Fund looks to take advantage of market neutral strategies in the crypto asset market.
The Fund seeks to deliver meaningful returns by exploiting inefficiencies in crypto markets, with a focus on preservation of capital. The Fund is domiciled in the British Virgin Islands. Under BVI Law, offers can only be made on a private basis. If you are interested, please get in contact with the team at Apollo Capital.