Abraxas Capital Management
Abraxas Capital Management (Abraxas) is a London-based investment manager founded in 2002. Initially focused on the traditional finance sector, Abraxas began managing the flagship and multiple award-winning Elysium Global Arbitrage Fund in 2018. iElysium was the first EU-regulated digital assets fund to receive a license from a European regulatory authority under the Alternative Investment Directive Framework, commencing operations in Europe immediately thereafter. Abraxas expanded its portfolio management to include other sub-funds, the Elysium Alpha Bitcoin Fund in 2022 and Elysium Alpha Ethereum Fund in 2023 (the ‘Funds’). Luca Celati, who is responsible for risk management in his capacity as Abraxas Chief Risk Officer, co-founded Abraxas in 2002 and participated in launching its first fund in 2003.
The Funds were engaged in extensive digital asset trading, with an average monthly volume of hundreds of thousands of trades. The existing accounting system was overwhelmed with that volume, leading to significant administrative challenges in trade recording and financial reporting.
NAV implemented a portfolio accounting system designed specifically for high-volume digital asset trading, featuring advanced tools to track and manage a large number of trades via API and accurately calculate gains and losses. The ability to drill down to on a trade-by-trade basis enabled a quantum leap in granularity. The experienced NAV team seamlessly integrated the system within existing infrastructure to more efficiently process the Funds’ transactions.
“The new system totally revamped our financial reporting,” Celati said. “Proper classification of realized gains, unrealized gains. and losses delivered a marked improvement in accurate and timely reporting.”
With Abraxas clients trading across 14 exchanges and with more than 76 wallets, the existing setup required significantly improved digital asset accounting capabilities to support complex CeFi and DeFi transactions. In particular, the funds’ foray into the emerging DeFi arena called for specialized accounting practices and processes to forestall errors in recording digital asset trades and retain the ability to generate accurate realized and unrealized gain/loss reports.
The experienced NAV digital asset accounting team provided the specialized expertise necessary to accurately manage and record all trades, quickly connecting all exchanges and wallets via API in order to independently pull all trade, transaction, balance/position information, and Mark to Market (MTM) calculations. By implementing these advanced accounting practices uniquely tailored to digital assets, NAV was able to support precise calculation of gains and losses and generate reliable financial reporting.
“With NAV’s expert support, we were able to achieve accurate trade recording and reporting,” Celati said. “The enhanced financial transparency and consistent performance reporting we gained is a major benefit for both fund managers and investors.”
The fund had previously been encouraged by auditors to strengthen financial reporting in order prevent inaccuracies and to cope with rapid Asset Under Management (AUM) growth, coupled with an increasing base of institutional investors.
After NAV implemented the new accounting system and revised the allied financial reporting processes, all records were complete, compliant, and accurate. The improvements supported a much less stressful and more orderly, stable audit process and regulators positively noted the upgrades as well.
The subsequent audit resulted in a clean report, meeting all compliance and financial reporting requirements and boosting the funds’ status and reputation with regulators and investors. “With NAV’s flexible and competent support, the quality of our financial statements was substantially improved. With precise and reliable portfolio accounting data, NAV enabled us to enhance the credibility of our financial reporting and its supporting infrastructure, a critical attribute for investors,” Celati said. “As a result, we were able to achieve a clean audit report, boosting confidence among stakeholders and positioning the fund for future success.”
iElysium Funds mentioned in this document are sub-funds of Heka Funds SICAV PLC, an Alternative Investment Fund authorized and regulated by the Malta Financial Services Authority under the Investment Services Act (Cap 370 of the Laws of Malta).