- Crossgate Capital’s Executive Director said that the Company’s priority has been creating a strong back-end infrastructure.
- The Company has been consistently building its portfolio and has recently commenced marketing Crossgate Capital.
- Without promotional activity, the Company has already been attracting investors who have actively sought to find and invest with a cryptocurrency specialist.
- The Company has been recently listed on the USX to provide the potential opportunity for shareholders to trade their shares.
We recently sat down with Scott Lester, Executive Director of Crossgate Capital to see where Crossgate Capital is now at, since the Company is just over two years old.
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The Executive Director stated, “At the start, there were no references to look at. We launched a new, innovative product in the NZ market. Our initial focus has been on ensuring the back-end infrastructure is robust, embedding processes and controls and establishing key partnerships with industry leaders.”
Collaboration with BitGo
One of the key partnerships is BitGo, who is considered as one of the international leaders in providing advanced cold storage solution. This means that Crossgate Capital’s assets are held in a wallet that is not connected to the internet, with the aim to prevent their assets being accessible to anyone apart from Crossgate Capital. BitGo is purpose-built for institutions demanding the highest-level of security and compliance.
Lester noted that “We have provided a strong structure. Also, considerable time has been spent on researching, building, and refining our portfolio. For the first few years we have not actively promoted Crossgate Capital. However, we are now in a position to commence our marketing program.”
What does Crossgate Capital’s financial statements reflect?
We reviewed Crossgate Capital’s latest audited financial statements. The Company spent just NZ$3K in Year 1 and NZ$34K in Year 2 on marketing.
We enquired when the Company is planning to commence its marketing activity and promote Crossgate Capital.
Scott Lester responded, “As this is not an off the shelf product, we have been concentrating on ensuring that Crossgate Capital is set up in an appropriate manner. For us, it is not about speed to market, but ensuring strong delivery and execution. We are pleased that without marketing activity the Company has already attracted over several hundred investors.”
Lester continued, “For those users that have been looking for an easy way to invest in cryptocurrencies and actively sought to find us, many of these investors have now invested multiple times with us. They understand the benefits of investing with Crossgate Capital. We have now recorded well over one thousand investor transactions and are allotting shares on a weekly basis. For us that demonstrates a strong customer experience and the demand for the product.”
He added, “We were pleased to announce at the end of our financial year, NZ$2.7million pre-tax increase in the valuation of Crossgate Capital’s assets. This has therefore delivered a growth in the underlying value of our shares since inception.”
Lester was keen to note that investing in this asset class has a higher risk profile than other forms of investing and is more volatile.
What is Crossgate Capital’s objective?
The Executive Director of the Company continued, “Our objective is to deliver returns to investors. Another benefit of investing with Crossgate Capital is estate planning. Crossgate Capital is a traditional investment vehicle, with shares titled in the investor’s name, which may provide an easier and traditional solution in respect to estate planning. If an unfortunate event occurs, an investor passes away or becomes incapacitated, the shares you hold form part of the assets of your estate”.
When investors invest in cryptocurrencies directly what plans do they put in place to ensure their beneficiaries can access their investment? If the private keys to a cryptocurrency wallet are no longer available, then the investment in cryptocurrencies could be lost forever.
Scott Lester noted, “This is often an overlooked issue. As blockchains are highly secure and the entire process is decentralised, there is no central authority to engage with. This may make whatever cryptocurrency you have invested in a challenge to pass on. Having a plan in place may be beneficial, otherwise there is the potential for a lot of wealth to be lost.”
Crossgate Capital recently listed on the USX* a New Zealand based share trading platform. It provides a mechanism for shareholders to buy or sell shares in a company.
Scott Lester commented, “The objective is to provide additional liquidity to our investors. We provide an easy on-ramp to a modern product whilst providing all the benefits that are associated with a traditional share offer.”
In regard to next steps, Lester advised that continual development of the portfolio is their focus, and a number of other assets are currently under consideration.
Scott Lester commented that “Our roadmap was to start promoting Crossgate Capital after ‘the plumbing’ was embedded. We are now at the stage, where we can focus on marketing Crossgate Capital to gain awareness that we are a specialist investor in this emerging asset class, have a track record and the requisite expertise to manage all the challenges of investing.”
Crossgate Capital Limited is the issuer of the products. The Product Disclosure Statement for the offer is available and can be obtained on their website here. The USX is not a licensed financial product market under the FMCA. Investors trading in securities quoted on the USX do not have the protections provided by Part 5 of the FMCA and the monitoring of market obligations by the Financial Markets Authority (FMA). Efficient Market Services Limited, which operates the USX accepts no responsibility for any statement in this article.