London-based manager aims to raise Europe’s biggest cannabis fund
Europe’s small market for investing in cannabis is showing signs of life, with a London-based investment firm focused on wealthy individuals hoping to raise the region’s biggest dedicated fund.
North America dominates cannabis investment, with 12 out of 14 cannabis-focused exchange traded funds globally listed there, according to data group ETFGI. Returns have often been poor.
But Chrystal Capital Partners believes a growing wave of legislation will boost the popularity of cannabis investment, and its potential returns. It is hoping to raise an initial $100m for the Verdite Capital Fund, an actively managed fund launched on Monday, before growing it to $200m through a later fundraising.
“We think this will be a highly regulated industry in 10 years’ time,” said Kingsley Wilson, an investment partner at the firm, acknowledging that regulatory risk had deterred many private equity and institutional investors from the sector. “Regulation and funding will underpin the market transition and how it moves from an illegal to a legal market.”
Chrystal’s strategy will focus on medical marijuana, cannabis-derived drugs and so-called CBD — a cannabinoid that does not make users feel high. About half of its assets will be invested in North America and at least 35 per cent in Europe. It will avoid companies supplying marijuana for recreational use, Chrystal said.
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