Asset manages quantitative crypto active investment funds since 2019 and takes on a promising market with Parfin's support.
The year is 2019 and the global cryptocurrency market is making large and consistent strides toward consolidation. In Brazil, a combination of pioneering spirit, strategic vision, structured operations, and active management gave rise to a B2B partnership that became a success story and is still bearing fruit today for two of the main players in their niche markets: digital asset fund manager Titanium Asset and Parfin, the main infrastructure player for digital assets in Latin America.
"Before the firm was born, I was already using Parfin's system," says Titanium founder Eduardo Zanuzzo. Three years ago, he and his partner Guilherme Bernert Miksza realized their dream of helping Brazilian investors access the crypto active market in a regulated manner in the country. Testing for the platform lasted about a year and a half, during which time the company achieved the ideal format for the system to kick-start operations.
Today, Titanium Asset operates a portfolio of four funds – three of which are crypto-based (Structure, Galaxy and Access) and one in fixed income (Liquid, a kind of cash fund, which guarantees the company's daily operational flow).
The partnership established in 2019 helped develop the operations of both companies. While Parfin was collecting feedback to generate more efficiency within the platform, Titanium was shaping what it believed to be the ideal environment for its operations.
"We are here to join the ranks and even help demystify the crypto market in Brazil and worldwide. There is room for everyone, and nothing better than walking down that path together."
— Eduardo Zanuzzo, Founding Partner, Titanium Asset
The main challenge Titanium faced at the start of operations was to position itself in the market as a regulated crypto fund manager in Brazil – meaning that it is subject to the rules of regulatory bodies such as the Brazilian Securities and Exchange Commission (CVM). Until then, those who did these operations in the country used a very alternative method: the creation of a fund manager abroad, which operated in crypto, and the creation of another manager in Brazil, which only bought shares of this fund operating abroad.
Since Brazilian investors were becoming increasingly interested on the topic, the two partners saw the opportunity and started to search the market for a company that could offer a platform for management, custody, and trading of digital assets. They first turned to the United States, where there were modular solutions capable of handling the entire crypto-asset management. But they were surprised to discover that there already was a company that specializes in this format right here in Brazil.
“Today, Parfin is not only a system, it is one of our partners. Back then, we had the understanding that Parfin would be very valuable to the cryptocurrency market and especially to crypto-asset funds.
— Eduardo Zanuzzo, Founding Partner, Titanium Asset
Partners and transformation agents for a promising market
During their search, Miksza and Zanuzzo learned about Parfin and scheduled a call with its three founding partners: Marcos Viriato (CEO), Alex Buelau (CTO) and Cristian Bohn (CPO). Their ideas lined up, and Titanium came out of the meeting with a free trial of Parfin Terminal, a solution created to facilitate the routine of asset managers and trading desks.
They still had to face a lot of bureaucracy in order to operate within the rules in Brazil. After opening an investment fund with a business registration number (CNPJ), they needed the support of an administrator who could open accounts in international exchanges (FTX, Kraken, Coinbase, among others). This administrator oversaw the exchange of documents between Titanium and each of the exchanges, creating a transparent and secure environment for trades made in Brazil – the CNPJ of the funds is linked to accounts held abroad.
For the executive, the platform was relevant even for this process: the administrator used it to check the accounts and the progress of processes on a daily basis. "Parfin has systems that make a lot of sense for the regulator, for the investor, for the distributors, and for the market as a whole," says Zanuzzo. "And we believe that you have been key to our ability to implement our fund structure in Brazil," he adds.
The partnership has been helping transform a market that is very promising and has enormous growth potential. Zanuzzo says that "operational efficiency" is the main gain in the relationship between the companies, since Titanium did not need to allocate resources to develop its own management platform.
"We use Parfin because we trust the system a lot, in terms of security and all the validations. If we weren't so comfortable with them, we wouldn't be together," reinforces Titanium's managing partner, pointing out another differential besides cost savings: gains in agility.
The consolidation of data on the Terminal allows users to easily check real-time balances and transactions of all exchanges where the investment funds have accounts. The format also helps mitigate errors, since the data compiled into the API does not go through manual processes (copy and paste, for example).
Can you imagine if the manager had to access each platform individually and tabulate all the data in spreadsheets to generate reports? "I'll see it now and I can tell you how many $BTC I have, how many $ETH, how much cash I have, what the FTX balance is, the Kraken balance... exactly everything in real time, in a single platform," added Zanuzzo.
The trusting relationship between the partners established a co-creation climate that persists to this day. The Titanium executive belives the communication channel is very good and favors a constant practice of exchanges that involves not only the demands of the asset, but also the active monitoring that Parfin offers. These talks led to new functionalities, such as the possibility of closing exchange rate transactions on the platform, in partnership with BTG Pactual (responsible for remitting dollars abroad).
For the fund manager, funds are raised in Brazilian reais, which need to be converted so that they can be available on the American exchange. Now, Titanium can check the rate right on the screen and, if it is favorable, it can be locked on the spot; if the operator agrees, it closes the rate without having to call the desk. Because it works in real-time, the rates are usually very competitive and often better than when negotiated over the phone.
Is there room in the crypto fund management market?
In Zanuzzo's own definition, Titanium is a fully active asset manager, which manages funds on a daily basis based on proprietary metrics and strategies defined by the company. Even in the case of options aimed at qualified investors – funds that may be more exposed to cryptocurrency – about 20% of the funds are allocated to fixed income (for Access, the CVM requires that exposure to digital assets not exceed 20%).
As the B2B market in general still has doubts about crypto-activities, Titanium believes that working with a company like Parfin reinforces the security image and adds credibility to its investment funds. "I can sit down with a distributor and say 'With Parfin, you have the report when you want it, for the dates you want, and if not, they'll produce it and deliver it to you,'" said Zanuzzo.
According to him, the market niche (crypto fund management) is very broad and there is room for everyone operating in it. Today, there are two or three other players that act in a similar way, with different strategies, but that asset does not see as competitors, but as pioneers of a new path that is being followed with professionalism and increasingly qualified information.
“Parfin is ideal for various market players: Securities Brokerage Houses (CTVMs), CVM, Anbima, administrators, auditors, distributors. It can give them the comfort of viewing everything on the same platform, in real time.
— Eduardo Zanuzzo, Founding Partner, Titanium Asset
What is the advantage of treading new paths?
Those who explore new markets has access to the best opportunities and reaps the rewards of being considered an expert on the subject. This is why Titanium has become a reference in crypto-based fund management in such a short time of operation. With Parfin's technological support and security, the asset has developed a solid and consistent portfolio of clients who seek the highest rates of return and the best financial results without giving up efficient risk management.
What if your company is our next success story?
Exploring the cryptoactive world is easier with those who already know the shortcuts to get ahead. Go to www.parfin.io to see how we can help you. I'm sure we'll find a match!
