Hendrik Leber is the founder of Acatis, an investment fund company for wealth managers and banks. Acatis manages around €3.5 billion for its clients and is the first traditional investor globally to have integrated bitcoin into its portfolio. In an exclusive interview with BTCManager, Leber explains how he came to Bitcoin and what is the role of the cryptocurrency in a portfolio.
- 1 You recently integrated Bitcoin in the global balanced fund Acatis Datini Valueflex. How did you come to this decision?
- 2 What makes Bitcoin interesting for you as a wealth manager?
- 3 What is Bitcoin’s role as part of a portfolio?
- 4 How do you assess the relation between risk and return of Bitcoin as an asset?
- 5 How has Bitcoin performed in your fund so far?
- 6 Do you think that it is inevitable that other institutional investors like retirement funds, insurance companies, and banks will follow?
- 7 With the fund, you bought shares of the Bitcoin Tracker XBT. Do you ever imagine directly buying Bitcoin?
You recently integrated Bitcoin in the global balanced fund Acatis Datini Valueflex. How did you come to this decision?
There have been different initiators. First I listened to Carsten Otto of P2P Labs at the Frankfurt University. After this presentation, I understood Bitcoin and the Blockchain for the first time. A second initiator was Patrick Huble, from the think tank 2iQ, with which we co-operate. He keeps me up-to-date and told me much about Bitcoin.
What makes Bitcoin interesting for you as a wealth manager?
Many colleagues use gold to protect themselves from uncertainties. I thought that bitcoin can do the same. Bitcoin is limited, it is mined, Central Banks cannot access it, it can be transferred across borders. In times of uncertainties and the manipulation of financial markets, Bitcoin is a real alternative.
What is Bitcoin’s role as part of a portfolio?
It is a commodity from which I expect to be stable in times of inflation, currency devaluation, and expropriation. Therefore it is some kind of financial disaster control. On top of this, there is a growing demand for bitcoin transactions, (illustrated below) for example in India or from migrant workers, while the supply will remain limited.
Seven-day Average of Confirmed Transactions Per Day
How do you assess the relation between risk and return of Bitcoin as an asset?
The risk is high. There is the volatility we already know from gold. Additionally, we have technical risks, like that some concepts of Bitcoin fails for reasons we do not know by now, for example, quantum cryptography. And we have the risks of theft and manipulation.
With a base of zero, the return is better than of money market accounts since parking liquidity today usually results in negative returns. But I expect also an increase in the price of bitcoin, as the demand for bitcoin as a means of transactions rises, while the supply stays stable.
How has Bitcoin performed in your fund so far?
Our first buy was conducted on October 7, 2016. Since then the price has appreciated 35.49 percent. This alone gave our funds, as a whole, a return of 1.06 percent and we gained more than €1 million with bitcoin’s price rise. This is quite good and ranks in the top 20 percent of the quality of our assets.
Do you think that it is inevitable that other institutional investors like retirement funds, insurance companies, and banks will follow?
I discussed Bitcoin with our clients, with banks and insurance companies and so on. Most of them find Bitcoin interesting, but as of now, they are not ready to take further steps. Like me, some colleagues do privately hold small amounts of bitcoin but are miles away from integrating them in their professionally managed funds. I think this will happen, but it needs some time.
At the same time, I see that banks are by now nearly completely blinding out the importance of the Blockchain for transactions and security trading. Some institutions work on Blockchain projects, but there are only a few. If someone would build a checking account with bitcoin, including standing orders, security trading, credit card, ATM and so on, I’d be in instantly.
Yes, I can imagine it, but I am not allowed to do so. We cannot buy bitcoin directly since they are not in the list of assets we are allowed to use. For investment companies, there are really only a few options to invest in bitcoin. As long as there is no ETF, the Bitcoin Tracker XBT seems the best option.