Joining the ranks of money managers getting in on cryptocurrencies, Brevan Howard Asset Management will start investing in digital assets.
According to a Bloomberg source, the firm will start by investing up to 1.5% of its $5.6 billion main hedge fund in digital assets. Co-founders of crypto investment firm Distributed Global, Johnny Steindorff and Tucker Waterman, will oversee this initial allocation. According to the source, the fund will focus on a wide range of digital assets beyond bitcoin.
Alan Howard’s crypto leanings
The hedge fund’s recent decision should come as no great surprise, given its co-founder’s crypto leanings. Alan Howard has personally invested in cryptocurrencies. Additionally, the firm recently acquired a 25% stake in One River Asset Management. The $2.5 billion firm has cryptocurrency funds which Howard backs.
Howard has also been an investor in Distributed Global since early 2018. The firm happens to operate a crypto venture capital along with Singapore’s Temasek Holdings Pte. Four years ago, Howard also started the affiliate platform that all trading will take through Elmwood Asset Management. Howard was also among the investors during the initial funding of Bakkt.
Hedge fund bouncing back
Although this will be the firm’s first major foray into crypto investing, Brevan Howard has been preparing to do so for some time. Over the last few years, Brevan Howard had been developing its digital trading technologies. It was also assessing the sector’s suitability for investors. By Q4 of last year, Brevan Howard felt that the industry was mature enough to invest a small amount of its clients’ cash.
The hedge fund is best known for its macro trading prowess. Recently, it has been in expansion mode, following a record year of gains. The firm has had several mediocre years, which saw several clients take flight. However, Brevan Howard is now on the rebound. After assets fell to about $6 billion two years ago, a drop of more than 80% from their peak, they have recovered to over $13 billion. Last year it had its best annual return since 2003, a gain of 27.3%.
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