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BH Digital’s current capacity of $1.5 billion is expected to rise as the firm is still open to more investment, accepting a minimum commitment of $5 million.
BH Digital, a crypto-centric Brevan Howard Asset Management subsidiary, has raised over $1 billion in funding from institutional investors. The firm, however, has yet to commit all the funds to the markets due to a lack of liquidity.
BH Digital was launched in September 2021 as a subsidiary of the London-headquartered hedge fund management company Brevan Howard. This is said to be the largest crypto hedge fund launch yet, with a capacity of up to $1.5 billion; impressive even by traditional hedge fund strategy standards. With losses of about 4% to 5% from its launch until June, considering current crypto market conditions, a source refers to the funding as an “absolutely massive” result.
The crypto market took a massive hit when one of its top protocols – Terra – went under, taking $43 billion off the market. This caused a ripple effect felt throughout the industry and drove some crypto investment and lending firms to the brink of bankruptcy.
“Their returns, relative to the market, are unbelievable,” another source said.
The digital asset-focused flagship uses a multi-, manager and multi-strategy approach in its investments. BH Digital has a staff of over 60 and employs strategies such as quantitative trades and relative-value plays. There are teams or “pods” of portfolio managers who work with support from analysts and engineers. The firm also has over 20 external blockchain engineers associated with it under full-time retainers.
BH Digital’s current capacity of $1.5 billion is expected to rise as the firm is still open to more investment, accepting a minimum commitment of $5 million. It is uniquely placed to attract traditional investors as its team of partners includes some world-renowned hedge fund investors, including those that have only exclusively worked in traditional finance in the past.
To this point, a source commented:
“That’s the thing about Brevan: [Limited partners] that haven’t touched crypto with a 10-foot pole trust them. The fact that they’re an unproven new launch almost doesn’t matter. If I’m an endowment, who am I going to trust with my money? One of the world’s smartest macro guys? Or a crypto native who doesn’t speak my language?”
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