SeDCapital, the wholly-owned capital markets investment arm under Alset International has, on April 20, entered into a joint venture agreement (JVA) with digital asset management firm Novum Alpha.

Under the agreement, SeD Capital will own 50% of the issued and paid-up capital in the joint venture company (JVC), Credas Capital.

The remaining 50% will be owned by Novum Alpha, a leading digital asset management firm that’s based in Singapore. The company specialises in trading cryptocurrencies and has a regional footprint in Malaysia, Vietnam, Indonesia and Thailand.

Credas intends to develop and launch its maiden digital assets-based Exchange-Traded Product (ETP) in the 4Q2021 on the SIX Swiss Exchange.

SIX Swiss Exchange is Switzerland’s principal stock exchange and one of the largest exchange in Europe.

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Novum Alpha will, via the JVC, contribute its know-how, management expertise, intellectual property rights and undertake to act as a fund manager of the ETP.

It will also be responsible for managing the listing and maintenance of the ETP on the SIX Swiss Exchange.

SeDCapital will tap on its investor network to market the ETP to potential investors while fulfilling the necessary reporting requirements.

The launch, operations and expansion of Credas will be financed by an initial shareholder loan of US$150,000 ($199,708). Of the amount, 90% will be provided by SeDCapital, and the remaining 10% by Novum Alpha.

The initial shareholder loans bear a coupon rate of 0% per annum and will be repaid on a “first-in-first-out” basis, with older loans to be repaid first, out of Credas’ operating profits.

In addition, Credas intends to launch algorithmically-managed, cryptocurrency tracker products that will provide investors broad-based exposure to an automatically rebalanced portfolio of liquid cryptocurrencies, through an actively-managed cryptocurrency ETP.

Credas will also pursue the listing of other cryptocurrency-focused ETPs in due course, including quantitative digital asset trading products that seek to generate returns from volatility inherent in the digital asset markets, reads the joint statement between Alset International and Novum Alpha.

“Today, we are delighted to announce our strategic partnership with Novum Alpha, a company that we believe harnesses deep know-how and capabilities to bring new, innovative and investor-friendly cryptocurrency ETPs to market. Due to the growing investor interest this asset class has garnered in recent times, we are confident that our strategic decision in this venture will help us generate significant value for our shareholders,” says Chan Heng Fai, executive chairman of Alset International.

“Novum Alpha is privileged to be working with Alset, a visionary and leader in generating value from a vast array of businesses, as the Group now applies its experience to digital assets. As digital assets enjoy growing mainstream adoption and increasing institutional participation, Alset and Novum Alpha are well-positioned to ride this next wave of growth by making digital assets more accessible, while unlocking value for an entirely new investor class,” adds Patrick Tan, CEO and general counsel of Novum Alpha.

Shares in Alset International closed flat at 6.2 cents on April 20.