This investment firm from the 1930s is getting into cryptocurrencies…

The nearly 100-year-old commodity-focused asset management company Neuberger Berman is launching a cryptocurrency volatility fund. The fund will give the firm exposure to cryptocurrencies and digital assets through derivatives and other investment vehicles. This is interesting considering Neuberger Berman’s history! 

Lehman Brothers acquired the firm in the early 2000s. Of course, Lehman Brothers filed for bankruptcy when the financial crisis unfolded near the end of that decade. Yet somehow Neuberger Berman avoided a similar fate.  With the help of private equity, the firm was able to stay alive and take its assets under management with it. 

Today, the firm is still thriving, and it has nearly half a trillion dollars under management. Neuberger Berman’s interest in cryptocurrencies started with a post titled “The Bitcoin Experiment.” It implied the asset was something to keep an eye on. Almost six months later, the firm is not just keeping an eye on it but establishing a hedge volatility fund.  

When I see a very traditional firm like this developing a fund centered on cryptocurrency, it is telling. It clearly sees cryptocurrencies as an asset class that moves differently than – and sometimes counter to – other asset classes. And it sees a benefit in gaining exposure to this asset class. 

Not only can it be highly profitable, it can also act as a hedge against a portfolio full of more traditional assets. The firm clearly saw enough potential in this asset class that it couldn’t get through traditional investment classes like stocks or bonds. It is a way for the firm to continue to deliver results even when certain asset classes underperform.  

Witnessing an older firm like this build exposure to cryptocurrencies is an indication that this asset class is one to take seriously.