Launch of the Aaro White Paper Series (DLT/ Blockchain Technologies & Cryptoassets)

London, United Kingdom, November 2020 -- Uncertainty persists across markets and all established asset classes. Investors are looking for alternatives that offer high return potential plus diversification benefits. Some of the most exciting opportunities are in DLT/ Blockchain-related Technologies and Cryptoassets, a fast evolving and uncorrelated new asset class.

Aaro Capital, whose team is focused on capturing these opportunities through the Aaro DLT Multifund, an institutional quality fund of funds, has launched a series of informative White Papers. These White Papers are designed specifically to provide thoughtful insights for professional investors with an interest in this exciting new asset class. Topics include the Economics of DLT & Cryptoassets, the future of Cryptocurrencies, Digital Money, Decentralised Applications and Markets.

Aaro’s White Paper Series is supported by a highly informative and well attended Thought Leadership Series of webinars, with the theme of “DLT & Cryptoassets 3.0 – The Evolution of a New Investment Class”.

Please see attached one of Aaro’s White Papers, “An Introduction to Distributed Ledger Technology.” The paper examines the economics behind Distributed Ledger Technology (DLT) and related concepts, including Bitcoin, blockchain and cryptocurrencies.

Misconceptions about DLT and Cryptoassets persist, while the technology and associated market infrastructures are still maturing. The possibilities for cost savings, user benefits and competitive advantage are nevertheless immense. This revolutionary technology is also creating compelling investment opportunities.

DLT’s impact will be felt across many industries, but it is at the early stages of its growth. The evolution of this often misunderstood technology is illustrated by analogies drawn from previous technology market cycles, such as in hardware (1950-1970), software (1970-1990) and networks (1990-2010).

A critical element in the efficient functioning of any market is trust in its systems for recording transactions. Buyers and sellers need to be able to trust that this information is kept safe and updated correctly, so that they have a path to recourse should a dispute arise. For example, a buyer on eBay has to trust that the network will register their transfer of money and ultimately send the goods they purchased, despite never physically meeting the seller.

Until recently, updating and maintaining records of transactions could only be performed by trusted intermediaries, such as banks, firms or governments, operating in an environment with strong institutions. These intermediaries can obtain market power, which they may abuse.

DLT can alleviate this issue with more efficient and trusted systems of disseminating information that can bypass these institutions. DLT promotes trust among market participants because all elements of a transaction recorded on a ledger can be reliably and directly verified at low cost, by any participant. Because ownership of the ledger is shared, there is no single owner who can abuse its market power in the future.

DLT is particularly advantageous over traditional centralised or shared databases in low trust environments. Examples include:

  1. International Remittances, Cross Border Transfers and Clearance of Payments
  2. Trade Finance
  3. Supply Chains
  4. Insurance
  5. Healthcare

While DLT has tremendous potential, the paper also addresses the obstacles faced by the technology in terms of security, scalability and decentralisation. For example, blockchain faces the challenge of withstanding malicious attacks that aim to corrupt or reverse recorded transactions. Scalability, or the number of transactions per unit of time that the system can perform, is still work in progress. Decentralisation of Block Production (DBP) is about the number of independent block producers and the barriers faced by a new participant to become a block producer.

This highly informative paper also reviews:

  • Different types of distributed ledgers, the most common being the blockchain;
  • Distributed vs centralised ledgers and how permissionless ledgers work, e.g. Bitcoin;
  • The myth that cryptocurrencies are designed to facilitate illegal behaviour;
  • How a Bitcoin transaction works;
  • The mechanics of transactions and smart contracts;
  • The mechanics, rewards and scale of mining;
  • Cryptocurrencies such as Ethereum, with its role in smart contracts and decentralised applications (dApps);
  • Ripple and its cryptocurrency, XRP, and its intended use as a bridge currency to facilitate foreign exchange and business-to-business payments;
  • Zcash, a cryptocurrency focused on the privacy of transactions;
  • One of the most important issues in the design of a blockchain: how consensus on the correct state of the ledger is achieved and who is going to write the next block;
  • “Sybil attacks”, where a participant hijacks control of the ledger and the protocols that are defences against them, such as Proof-of-Stake and Proof-of-Work protocols;
  • How a cryptocurrency on top of a distributed ledger works as an incentive and coordination mechanism;
  • The interplay between trust and market power, and the alignment of network participants’ incentives.

Aaro Capital believes that the best way to capture the investment potential of DLT and Cryptoassets is through a well-diversified and professionally managed Fund of Funds. Please see the Background Notes below.


Background Notes

The Aaro DLT Multifund launched on May 1, 2020. An industry first, this institutional quality fund of funds seeks to exploit the exciting investment opportunities in DLT / Blockchain-related Technologies and Cryptoassets.

The goal is to offer broad exposure to the long term growth of DLT and Cryptoassets, whilst protecting against the markets’ short term volatility. This will be achieved by investing across a range of funds with different investment strategies; an approach that provides a strong source of diversification in these fast-moving markets.

Aaro Capital’s Chief Executive, Peter Habermacher, points out, “Having invested our own money successfully in Cryptoassets, we also recognised the emerging opportunities in Blockchain-related technologies. Our research showed that the best way to capture these opportunities is through a professionally run fund of funds. None seemed available, so we applied industry best practice to build our own process, with adaptations to suit the DLT / Blockchain and Cryptoasset space.”

There are great opportunities in both areas: 

DLT / Blockchain: Across multiple sectors, like Finance, Logistics and Healthcare, both incumbents and disruptors are investing heavily in numerous emerging applications. According to Gartner Research, the Blockchain industry will deliver more than $3 trillion in value by 2030.1 McKinsey has identified more than 80 powerful use cases across a dozen major industries.2 This is a powerful growth story and a compelling long term strategic opportunity.

The Aaro DLT Multifund exploits these exciting developments by using economic analysis to identify the industries and companies whose deployment of DLT / Blockchain will create real value. Aaro identifies the funds, often with a fundamental focus, that are best placed to exploit the investment opportunities that will arise.

“Financial institutions and corporations in many different industries, plus governments, are investing in this novel technology at an increasingly fast pace. In 2019, $13 billion was invested in Blockchain projects3 and this is just the beginning” says Johannes Gugl, one of Aaro Capital’s Partners. “We believe that investment into DLT / Blockchain technologies and applications will continue to grow rapidly.”

Cryptoassets: Fidelity found that half of institutional investors now view Cryptoassets as having a place in their portfolios.4 There is great short term return potential, so long as the volatility and manager due diligence are approached properly. Cryptoassets are largely uncorrelated with other asset classes5, which makes them a powerful diversification tool.

The market is evolving fast, with a growing number of institutional players, such as Brevan Howard6 and Renaissance Technologies7 entering the space. More than 500 funds are already active, more than 160 with AuM over $50m.8 The Aaro DLT Multifund aims to capture the opportunities through funds following investment strategies including fundamental long-short, market neutral, quantitative arbitrage and trend following, each aiming to exploit short to medium term market inefficiencies, as well as the long term growth story.

Aaro Capital’s Chief Investment Officer, Ankush Jain observes, “This is still a young industry whose development is comparable to the early years of the Internet and there will be some big winners. Our aim is to identify and invest in these opportunities in a considered, prudent and risk-controlled manner. This is a remarkable opportunity for investors to participate in this exciting growth story.” 

Aaro Capital’s London-based team combines younger investors, such as CEO, Peter Habermacher and CIO, Ankush Jain with their direct experience of Crypto investments, with senior practitioners from the hedge fund industry such as Peter Rigg, former Global Head of HSBC Alternative Investment Group and CEO of HSBC Alternative Investments Ltd., and Mattia Rattaggi, former Head of Regulatory Affairs and Governance Reporting at UBS, Co-founder of SEBA Bank, and leading Digital Advisor at Crypto Valley. The firm also employs DLT / Blockchain experts as well as academic advisors from top UK universities.

The Aaro DLT Multifund’s approach is based on a unique process which was developed with a major institutional consultant. The process is based on well established methods, with customised adaptations for the analysis of DLT / Blockchain and Cryptoasset funds. Given the evolving nature of the industry and its structures, there is a deliberate emphasis on operational as well as investment due diligence.


Press Inquiries

FAO: Stuart MacDonald
Telephone: +44 (0) 7943 204427


Notes to Editors

About Aaro Capital

Aaro Capital is a Distributed Ledger Technology (DLT) and Cryptoasset Specialist which was established in 2018. Our aim is to inform professional investors on how best to access the exciting and rapidly evolving DLT and Cryptoasset growth story. We are working closely with established investment industry partners, as well as DLT specialists and economic professors from top UK universities. Our experienced team combines thorough economic and empirical analysis with established investment industry practices, to identify best-in-class active managers who prioritise effective downside risk protection.

Please note that Aaro Capital should not be referred to as the Investment Manager of the Aaro DLT Multifund. Please refer to the relevant disclaimer at the bottom of the background notes.

Intended Audience

  • Professional Clients (as defined in Annex II of the MiFID II Directive (2014/65/EU)
  • Individuals residing in the UK or Germany



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5 This is illustrated by a comparison between the MVIS Digital Assets 100 Index for Cryptocurrencies, and a series of ETFs. From Jan-18 to end Mar-20, the correlations were as follows: Equities (Vanguard Global Stock Index Fund ETF) 0.09; Bonds (iShares Global Corporate Bond UCITS ETF) 0.13; Commodities (S&P GSCI Commodity Index ETF) 0.10, Real Estate (iShares Global REIT ETF) 0.07, US dollar (US Nominal Dollar Broad Index) -0.07.
Even during Mar-20, the 1m correlations were as follows: Equities 0.36, Bonds 0.49, Commodities 0.52, Real Estate 0.36, US dollar -0.32.

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The Aaro Distributed Ledger Technology Multifund (“Aaro DLT Multifund”, “Multifund”, “Fund”) is a regulated Malta-domiciled Alternative Investment Fund (AIF) on the AK Jensen fund platform, offering quarterly liquidity with 90 days’ notice. The Fund is intended for Professional Clients (as defined in Annex II of the MiFID II Directive (2014/65/EU)). Aaro Capital is the trading name of Aaro Capital Limited (“Aaro”), a private limited company, registered in England and Wales with number 11419585, whose registered office is at 62 Wilson Street, London, United Kingdom, EC2A 2BU. Aaro is not authorised or regulated by the Financial Conduct Authority ("FCA"). Ankush Jain and Peter Habermacher of Aaro Capital Limited are appointed by the Investment Manager to perform the day to day portfolio management of the Aaro DLT Multifund under the authority, and on behalf, of the Investment Manager. Any information contained in this document relating to the Aaro DLT Multifund  has been approved by the fund’s Investment Manager, AK Jensen Investment Management Limited  (“Investment Manager”), a firm authorised and regulated by the Financial Conduct Authority with FRN 622484. Cryptoassets are at a developmental stage with variation in its regulation across different jurisdictions. Anyone considering investing into these types of assets should be cautious and take appropriate advice in relation to the risks associated with these assets including (without limitation) volatility, total capital loss, and lack of regulation over certain market participants. Past performance is not a reliable indicator of future results. This communication is being provided for informational purposes only and does not constitute investment advice and is not an offer or solicitation for investment.