IFA Magazine

Global asset manager Invesco has launched an investment fund focused on the metaverse.

With $1.6 trillion of assets under management, Invesco has launched the Invesco Metaverse Fund as an actively-managed equity investment vehicle that will focus on what Invesco calls the ‘metaverse value chain.’

Investing In Interconnectivity

We don’t generally associate the metaverse with investment banking on this site. Its reputation is a product of science-fiction, community gaming, and its potential to alter our social behavior. However, the investment giant has seen an opportunity in the market.

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Tony Roberts and James McDermottroe will manage the fund. Image Credit: Investment Week

Tony Roberts and James McDermottroe lead the project and are part of Invesco’s UK-based Asia and emerging markets team. Roberts reported that:

“It has been estimated that, by 2030, virtual and augmented reality could deliver a £1.4 trillion boost to the global economy”, said Roberts. 

“While the metaverse’s applications to entertainment are increasingly well-understood, the interconnectivity that it enables will likely have a transformative impact across industries as diverse as healthcare, logistics, education and sport. We will seek to capitalise on these opportunities through a highly selective, valuation-conscious approach.” – Invesco

Invesco is not the first fund manager to treat the metaverse as an investment opportunity, with Axa Investment Management, Fidelity, and HSBC launching bids earlier this year.

The Rise of Fintech

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New opportunities for the financial services sector through fintech. Image Credit: Forbes

The rise of fintech has heralded new opportunities for the financial services sector, and many organizations are keen to engage. Advances in Artificial Intelligence (AI) and Machine Learning (ML) have increasingly altered the function of the financial service sector, from in-person kiosks at the local bank to digitalized online banking.

According to Invesco Global Head of Thought Leadership, Dr. Henning Stein:

“With the pandemic functioning as an accelerant of change, more and more people are now availing themselves of financial services. In the arena in which I work, asset management, we are increasingly witnessing the democratization of investing. The likes of blockchain, tokenization and Open Finance are redefining the possible on an enormous scale.” – Dr Henning Steing, Invesco

Metaverse And Fintech

In 1992, science-fiction author Neal Stephenson coined the term ‘metaverse’ in his novel ‘Snow Crash.’ The metaverse offers a fully immersive digital experience. The financial has used this technology and watched as it has evolved, but this latest step indicates that the sector is ready to take a slice of the meta-pie for itself. For the financial industry, it offers the opportunity to implement an instant real-time decision-support system capable of generating non-investment alpha without losing the human element of business interactions.
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The metaverse is a virtual world utilizing cryptocurrencies. Image Credit: LeewayHertz.

A 3D digital universe that allows the sensation of meeting in person but enables instant access to digital information such as analytics and diagnostics would combine the best in-person and digital meetings.

“the metaverse” can include virtual reality—characterized by persistent virtual worlds that continue to exist even when you’re not playing—as well as augmented reality that combines aspects of the digital and physical worlds.” – WIRED

Investing In The Next-Generation

Thematically, the fund will focus on seven areas:

  • Next-generation operating and computer systems
  • Hardware and devices that provide access to the metaverse
  • Networks for hyperconnectivity
  • Immersive platforms developed with artificial intelligence
  • Blockchain
  • The interchange tools necessary to bring about interoperability
  • Services and assets that will facilitate the digitization of the real economy
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There are 1.07 billion metaverse users worldwide. Image Credit: Phocus Wire

The Invesco Metaverse fund will invest in large, medium, and small-cap companies across the US, Asia, and Europe. The investments will include companies whose stocks help facilitate, create, or benefit from the growth of immersive virtual worlds.

Invesco isn’t only looking to invest out of excitement and a desire to innovate. The goal is to make money, and as those earlier projections show, it seems optimistic that they’ll cash in. As of 2022, there are 1.07 billion metaverse users worldwide, confirming its place in our society.

Does This Herald The Crypto-Age?

As purchasing behaviors continue to shift online, crypto payments will become the primary method for metaverse purchasing. Axie Infinity (AXS) is the biggest metaverse cryptocurrency and has attracted more than three million active players.

Banks and fintech have worked closely with real-world financial markets, but cryptocurrencies have been the domain of alternative organizations. PayPal and have jumped ahead, investing with confidence in cryptocurrency.

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With PayPal and Mastercard on board, other banks are sure to follow. Image Credit: Equity Trust.

It may still be in its early stages, but the metaverse will be vital to future marketing and sales funnels. Rather than filling a static screen with ads, the metaverse will be another world with physical storefronts, curated shows, and interactive customer services.

Conclusion

If Invesco is ready to step into the metaverse, it’s worth considering whether this is a good time to invest. There have been issues in the past as cryptocurrencies crashed, suffered security incidents, and struggled to make it in the market.

As Invesco invests, the digital currency will likely enjoy further investment, and the evolution of the metaverse will accelerate.

Any investment/financial opinions expressed by Play to Earn Diary are not recommendations. Our content is for educational purposes only. If you plan to invest in any game or cryptocurrency then please do your own research and only spend what you can afford to lose.

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