CoinShares Acquires Napoleon Asset Management, Expanding into EU Markets
Nicholas Otieno Jul 05, 2022 03:50
The deal underscores interesting points about CoinShares. The digital asset firm has bought its rival based in France to double down on European Union expansion.
CoinShares Group, a Jersey-based digital asset investment firm, announced Monday that it has acquired Paris-based Napoleon Asset Management, a digital asset manager licensed under the AIFM Directive.
CoinShares said it signed and completed the transaction on June 30. The acquisition of Napoleon Asset Management is set to allow CoinShares to promote its products and services across the European Union (EU).
The France-based Napoleon Asset Management is licensed by French financial markets regulator Autorité des Marchés Financiers (AMF) under the Alternative Investment Fund Manager (AIFM) directive, which offers permission to market products and services across the EU.
The AIFM license is one of asset management firms' most rigorous European regulations. The license is a key component in CoinShares' ambition to become the leading investment group in the digital asset sector.
Therefore, the acquisition of Napoleon AM allows CoinShares to provide AIFM-compliant products and services across the European Union markets. CoinShares can now offer its exchange-traded products (ETPs) and other investment products across the EU, thus giving it a much-needed background for generating additional revenues.
The acquisition will also enable CoinShares to leverage active investment strategies based on algorithmic trading for digital assets built by Napoleon Asset Management teams.
CoinShares, which claims to be the largest digital asset investment firm in Europe, entered into an agreement to buy Napoleon Asset Management last year for Euro 13.9 million ($14.5 million) in stock and cash. However, the acquisition was subject to the AMF's' approval, which was granted on June 28.
Jean-Marie Mognetti, Chief Executive Officer of CoinShares, talked about the development: "We are very pleased to have received this approval from the AMF to acquire Napoleon Asset Management. Bringing the company into our group is a further step in the right direction toward investor protection. Our regulated status in a growing number of jurisdictions is one of CoinShares'' principal strengths; it reassures our clients and demonstrates our plans to lead Europe's' digital asset sector."
Market Fall Delays Settling Trade Deals
The move by CoinShares to acquire the French-based Napoleon Asset Management is part of the developing crypto deal-making trends amid the ongoing market crash. An increasing number of firms are seeking to stake positions in the industry.
So far this year, an estimated 42 deals have been announced to acquire various crypto-related companies. However, some market analysts say the turmoil in the crypto market could make it more difficult to close deals and others.
In May 2021, Novogratz's Galaxy Digital agreed to purchase crypto-custody specialist BitGo with Galaxy shares for $265 million in cash. The deal, which is waiting to close, promises to make Galaxy a major player in the competition to attract retail and institutional investors.
The deals come as crypto-related companies try to establish themselves as strong players, despite the fall in crypto prices, with Wall Street companies benefiting from all forms of markets.
M&A volume is expected to rise as firms with solid balance sheets seek to acquire crypto firms with weak balance sheets yet valuable assets or intellectual property.
Crypto firms are experiencing reduced profits and job cuts amid extreme market conditions. This will lead to exciting industry consolidation and M&A opportunities.
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