Skip to content

For professional and eligible investors. Capital at risk. Product-specific materials are access controlled.

Block Asset Management
enes
All investment capabilities

Multi-Manager Digital Assets

Manager selection is the decision in a digital asset fund of funds

Identifying, assessing and combining specialist managers whose return drivers differ from one another — and whose operational infrastructure stands up to institutional scrutiny.

Capability overview

Multi-Manager Digital Assets

Digital assets are an asset class in which manager dispersion is unusually wide. The difference between a strong and a weak manager in a single year has repeatedly exceeded the difference between a strong and a weak year for the asset class itself. That makes manager selection, rather than market timing, the dominant decision.

It is also an asset class in which the losses that have mattered most were operational rather than directional — custody failures, counterparty concentration, commingled assets and valuation weakness. We therefore treat operational assessment as a first-order investment question, not a compliance formality performed after an allocation decision has been made.

Opportunity set

A fragmented manager universe

Specialist managers pursue very different objectives — directional, relative value, liquidity provision, venture-style and infrastructure exposure. Few allocators have the coverage to map that universe, and fewer still have access to managers operating at limited capacity.

Return drivers that are genuinely distinct

Because these approaches draw on different sources of return, their behaviour in stress is not uniform. That dispersion is what makes a multi-manager structure meaningful rather than merely diversified in name.

Uneven operational maturity

Infrastructure standards across the sector vary far more than in established alternatives. Assessing custody, segregation, valuation and counterparty arrangements separates managers more reliably than headline returns do.

Our approach

Sourcing and screening

We maintain a continuous pipeline of managers, built through direct research and sector relationships rather than databases alone. Most managers reviewed do not proceed, and the majority of those are declined on operational rather than investment grounds.

Operational assessment before investment assessment

We examine custody arrangements, segregation of duties, counterparty and venue exposure, valuation policy, key-person dependency and control frameworks before evaluating the strategy itself. A compelling return profile does not compensate for an unsound operating model.

Combination, not accumulation

Managers are assessed for what they add to an existing set of exposures. A manager whose return drivers substantially replicate positions already held adds fee load and concentration without adding diversification.

Continuous review

Assessment does not end at allocation. Investment behaviour, operational developments and organisational changes are monitored on an ongoing basis, and deterioration in any of the three is treated as material.

Research framework

What we study when assessing this area.

  • The source of a manager's return, and whether it is repeatable or a by-product of directional exposure
  • Behaviour through stress periods and drawdowns, not only in favourable conditions
  • Capacity, and whether an approach degrades as assets grow
  • Custody model, asset segregation and the treatment of client assets
  • Counterparty, venue and collateral exposure, including concentration
  • Valuation policy, pricing sources and independence of the valuation process
  • Key-person dependency and organisational depth
  • Alignment of interests, fee structure and terms

Due diligence

Investment due diligence

Assessment of investment process, team, evidence of edge, risk framework and the consistency between what a manager describes and what the return history shows.

Operational due diligence

Review of legal structure, service providers, custody and segregation, valuation, reconciliation, controls, cyber and business-continuity arrangements.

Ongoing monitoring

Periodic re-assessment, tracking of organisational and operational developments, and review of whether original investment reasoning still holds.

Implementation principles

Conceptual principles. Product-specific portfolio information is restricted.

Diversification across return drivers

Exposure is spread across distinct sources of return rather than across managers who resemble one another.

Concentration discipline

Limits govern exposure to any single manager, approach or operational dependency, set in advance rather than negotiated after the fact.

Liquidity awareness

The liquidity profile of underlying approaches is assessed against the structure that holds them, so that dealing terms and underlying realisability remain consistent.

Risk considerations

  • Capital is at risk. Investors may lose part or all of the amount invested.
  • Digital asset markets are volatile and can move sharply and without warning.
  • A multi-manager structure introduces manager risk: an underlying manager may underperform, change approach, or fail.
  • Operational risks — including custody, counterparty, venue and valuation risk — are material in this asset class and may not be fully mitigated.
  • Diversification reduces reliance on any single manager but does not ensure a profit or protect against loss, and correlations between approaches may rise in stressed markets.
  • Past performance is not a reliable indicator of future results.

Institutional considerations

What an allocator should understand when evaluating this type of strategy.

Look-through and transparency

Allocators should understand what level of underlying visibility a multi-manager structure provides, and how frequently it is refreshed.

Layered costs

Multi-manager structures carry costs at more than one level. That is a genuine consideration and should be weighed against the access and diligence the structure provides.

Liquidity alignment

The relationship between the liquidity of underlying approaches and the terms of the structure holding them is one of the most important questions to ask of any fund of funds.

Valuation timing

Where underlying managers value on differing cycles, allocators should understand how and when that is reflected.

Related research

Product-specific materials

Product-specific materials are available to eligible investors through controlled investor access.

Eligible Investor Access

Other capabilities