Two Sigma is set to announce a collaboration with Coinbase Institutional to include information on digital assets on its Venn platform.
Venn, Two Sigma’s portfolio analytics tool, will provide joint research about cryptocurrencies to the firm’s institutional clients, as well as thought leadership including a series of articles and webinars about the state of digital assets. The new additions are intended to provide allocators with the tools to incorporate or consider crypto in their portfolio modeling and asset allocations.
Marco Della Torre, chief executive officer of Venn by Two Sigma, said the firm is responding to consistent institutional demand for trusted resources to learn about and approach digital assets.
“The primary driver is the customers of the Venn platform and the community of institutional investors that we work with,” said Della Torre, who joined the firm in June.
The collaboration will officially launch with a joint webcast on September 14, which will look at how to build risk and allocation frameworks to analyze digital assets as investments in institutional portfolios.
Working with Two Sigma is a strategic move for Coinbase, which is aiming to reach a larger base of institutional investors. Earlier this month, Coinbase announced a partnership with BlackRock, the world’s largest asset manager, to include direct access to cryptocurrency on its investment management platform Aladdin. This enables asset allocators and managers to buy and sell bitcoin directly through Aladdin. With Venn, Coinbase is chasing a similar objective, according to Anthony Bassili, head of asset allocators for Coinbase Institutional.
While digital assets have garnered institutional attention over the past few years, allocators remain wary of the asset class’s volatility, immaturity, and inherent risk — mainly cyber risk.
“From an interest perspective, though, they know that that’s what comes with new emerging asset classes,” Bassili said. He added that institutional investors are curious about the potential of digital assets, which can theoretically offer a differentiated return stream, uncorrelated alphas, and diversification.
“Our view is that we want to empower all institutions to be able to have access to the crypto infrastructure that we offer,” Bassili said.