By
Steve Muchoki
April 4th, 2024
The Galaxy Liquid Alpha Fund will be focusing majorly on expanding the company’s exposure to a wider range of crypto assets.
Digital asset merchant bank Galaxy Digital has launched a $100 million fund it calls the Galaxy Liquid Alpha Fund. Although the fund was recently launched in the second quarter, expectations are that it must have reached the target by the end of the year.
While the fund began with in-house capital, it has now attracted investments from individual investors and corporate entities from home and abroad. And so far, the fund is reportedly close to hitting $50 million in assets under management (AUM).
Galaxy Digital Eyes More Crypto Exposure
The Galaxy Liquid Alpha Fund will be focusing majorly on expanding the company’s exposure to a wider range of crypto assets. However, Chris Rhine, the firm’s portfolio manager confirms that only highly liquid cryptocurrencies will be targeted for investment. He also explained further that the fund will totally boycott short positions and meme tokens.
Additionally, Rhine explains how the Liquid Alpha Fund differs from most similar products. For starters, it doesn’t feature any lockups on capital. This means investors have access to their funds at any given time. Also, investors may redeem their rewards as frequently as monthly.
Another thing that Rhine noted is that the fund holds the interest of investors at heart. This is why he said the fund will be looking to improve the Sharpe ratio for investors. The Sharpe ratio is a measure of the risk investors take as opposed to the rewards earned.
Lastly, the timing of the fund may just be an added advantage, according to Rhine. He says:
“The advantage of launching in an extremely volatile market is to build a track record in markets that aren’t necessarily just going in a 40-degree angle up.”
Recall that the fund was launched in May, which was a notable bear market period. However, Rhine may just be right seeing as the fund has recorded an early success and is currently outperforming.
It is worth mentioning that Galaxy Digital Asset Management (GDAM) – which houses the Liquid Alpha Fund – has about $2.1 billion in AUM.