How Groupe Financier de Gestion (GFG) Simplified Digital Asset Exposure for Clients with 21Shares

How Groupe Financier de Gestion (GFG) Simplified Digital Asset Exposure for Clients with 21Shares

Nov 4, 2023
Market Leader
How Groupe Financier de Gestion (GFG) Simplified Digital Asset Exposure for Clients with 21Shares

Dhia Abbas, Chief Investment Officer of Groupe Financier de Gestion (GFG), has been in finance for a long time, “I began in finance in 1989. Myself and the others on my team, we have more than 20 years of experience in finance.” In all that time, he’s never stopped innovating, ”We always try to find something new that can help us in the performance of our portfolios.” GFG, founded in 1999, takes full advantage of that thirst for innovation. The company divides its work into three main activities—discretionary or advisory mandates, trading activity, and actively managed certificates.

Then, In 2020, GFG began exploring offering their clients exposure to digital assets, also called cryptocurrencies.

Navigating the Hurdles of Innovation

Innovation isn’t always easy. Dhia recalls, “In the beginning, our clients asked for cryptocurrencies, but it was difficult. Banks were saying no to crypto. Even today, they may still say no.”

The process was still new to many banks, just like it was new for GFG, “The banks didn’t have the experience for compliance, and their back offices weren’t sure how to handle these types of assets.” Crypto was still a nascent asset class, and getting exposure was difficult.

Streamlining Digital Asset Exposure for Clients

At first, Dhia didn’t have a lot of options to help clients hold crypto, “We were telling clients to open an account on Binance or with Revolut, but even that was in small amounts.”

But GFG was determined. The 2020 markets were unpredictable and the firm wanted alternative investment options. Dhia tells us, “We’re always looking for ways to diversify our activities because it can lead to gains for the clients while reducing volatility. We want to find instruments with less correlation with what we already have. Crypto was an excellent diversifier.”

That’s when Dhia met Sina Meier, Managing Director and Head of Switzerland & Strategic Relations & Middle East, “Sina showed us the crypto ETPs. It was so helpful and very efficient.”

Working with Sina and 21Shares, GFG had a straightforward solution for providing clients with the crypto exposure they wanted without the complexity of learning the digital asset space alone.

Onboarding with 21Shares

Hany Rashwan, Co-founder and CEO of 21Shares, stepped in to get the team up to speed. Dhia remembers, “Sina and Hany explained how everything worked. We found that it felt the same as other assets or equities. You can trade the ETPs like an IBM or Apple stock. There’s no difference for us.”

Dhia found that the 21Shares team was able to resolve concerns quickly and always had client needs in mind, telling us that at first “my main concern was liquidity,” which may have proven difficult with smaller assets, “I tried to find assets and instruments that made trading simple. The ability to buy a certain amount of crypto ETPs and sell them easily was what convinced us to begin trading.” The 21Shares market makers helped to bolster liquidity, making it effortless for GFG to trade digital assets.

The investment vehicle wasn’t the only difference, “What was most helpful was that the products were listed on the Swiss Six Exchange. For banks, it felt like a guarantee that the transaction would go through without any big problems.” The fact that 21Shares ETPs were available on mainstream exchanges made them accessible for GFG’s clients in Switzerland, Luxembourg, Monaco, Germany, and anywhere else they wanted to trade, “For clients who invest in dollars, they go through the Swiss exchange. For others, we can buy through European exchanges.”

“Digital Assets and GFG’s Secret to Long-Term Success”

Several years later, GFG and Dhia still enjoy working with 21Shares, “For clients, we take positions and keep them. We still have the positions we bought 3 years ago with 21Shares.”

Dhia lets us in on his secret to surfacing assets that make great long-term investments, “The most important thing is to work with people you trust and work with products that you can understand. I would never invest in something I can’t understand or I can’t see what are the main problems that could happen.”

Education is an essential component to maintaining strong positions, and 21Shares research has helped Dhia to break down the unique elements of the crypto ecosystem, “We receive the research and attend analyst calls. Our team has a lot of assets to follow, so it helps to join calls once a quarter.” When there’s a major update in the crypto ecosystem, like a halving, Dhea’s team relies on 21Shares research, “I appreciate that we have an update… we receive something that tells us what’s going on. It’s helpful.”

Looking Towards the Future

Dhia is excited for the future of digital assets, “we’re always looking to provide clients with different things, and I think digital assets could attract clients.”

GFG believes that digital assets will become more prominent in the next several years, and Dhia is preparing for the growth of the ecosystem, “My goal is for our portfolios to hold between 3%-5% in digital assets. Not all of our clients are invested yet, but my goal is for them to be. It should become obvious for people to invest in digital assets.” He also wants to inject digital assets into more of his strategies, “Three months ago we launched an AMC on artificial intelligence… Next year I’d like to introduce some ETPs to that strategy.”