Welcome to the latest edition of At the Forefront: Fintech Conversations!
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In this installment, our VP and Head of Content Sam Belden sits down with Jake Claver, Managing Director at Digital Ascension Group, a specialized multi-family office with a focus on bridging the gap between traditional finance and the evolving digital asset ecosystem. Jake discusses how family offices and private clients are approaching digital assets, highlighting the complexities and opportunities within this emerging space. He also shares his insights into strategies for maximizing portfolio value while navigating the unique challenges of digital asset investments.
As digital assets become more integrated into the world of traditional wealth management, family offices are increasingly exploring these alternative investments. Jake explains that while adoption has been gradual, more family offices are starting to allocate a portion of their portfolios to digital assets, especially as regulatory frameworks begin to take shape. Historically, most family offices allocate between 0.5% and 5% of their portfolio to crypto assets, treating them as a high-risk, speculative investment, but one that could provide substantial future returns. Jake emphasizes that the volatility of digital assets remains a concern, but it’s also an opportunity for those who understand the space to tap into.
Jake goes on to explain the key strategies that family offices can leverage to maximize the potential of their digital portfolios. He highlights the importance of diversification, advising clients to ensure that their digital asset allocation compliments their broader portfolio. Diversification, Jake notes, helps mitigate the high volatility of the digital asset market while still exposing clients to the upside of emerging technologies and innovations. Digital Ascension Group works closely with its clients to structure portfolios that balance risk and reward, offering market-neutral strategies in partnership with sub-advisors. This approach ensures that clients can maintain exposure to the digital asset market while minimizing their exposure to downside risk.
Another key strategy discussed in the episode is the use of risk-mitigating tools such as options and ETFs. Jake explains that by using these tools, family offices can create a safety net against market downturns while still benefiting from the potential upside of digital assets. He believes that as the market matures and more institutional players enter the space, there will be more opportunities to hedge against volatility, including through the development of more diverse financial instruments designed for digital assets.
As the digital assets space evolves, Jakes predicts that the next generation of family offices will be more open to leveraging blockchain technology not just for investment purposes but also for governance. He sees the potential for DAOs (Decentralized Autonomous Organizations) to play a pivotal role in the way wealth is managed across generations. DAOs could enable families to implement long-term governance structures that align with their values, ensuring that wealth is preserved and used to meet the family’s core goals. This shift in governance could also be a natural fit for those looking to preserve their wealth over the long term, while also making a positive impact on their communities.
Jake’s perspective on digital asset management underscores the importance of understanding both the opportunities and risks in the sector. He believes that the maturation of the digital asset market will be marked by increasing institutional involvement, regulatory clarity and technological advancements. Family offices that adapt early to these changes will be well-positioned to capitalize on the growth of this innovative sector.
To learn more about Digital Ascension Group, visit their website.
See below for a breakdown of what was discussed. Happy listening!
Timestamps:
1:10 – Bridging traditional finance services with the digital asset ecosystem
5:00 – Challenges and opportunities family offices face when allocating to digital assets
7:12 – Key strategies for maximizing the value of a digital asset portfolio for high net-worth families
9:35 – Emerging digital asset technology trends in the wealth management space13:20 – The role of DAOs in building a sustainable financial legacy and building long-term value
