SkyBridge Capital is working on pivoting the majority of its assets under management (AUM) to digital assets, as the sector represents “tremendous growth” for the firm.
The hedge fund was founded by former U.S. politician Anthony Scaramucci in 2005, and first delved into Bitcoin (BTC) in late 2020. The firm also has money deployed in other hedge funds, late-stage private tech companies and real estate, with its total AUM reported being around $7.3 billion.
Skybridge now manages a $7 million Bitcoin Fund among others and has been actively working to get a spot BTC exchange-traded fund (ETF) approved by the U.S. Securities and Exchange Commission (SEC).
Speaking with Bloomberg in the lead up to the annual SkyBridge Alternatives Conference (SALT) this week, Scaramucci said that the firm is repositioning itself to “eventually be a leading cryptocurrency asset manager and adviser”
“We made a decision during the pandemic that we had to relitigate our entire portfolio. There’s a pre-pandemic world and a post-pandemic world, and a post-pandemic world has a lot more government deficits—it has a lot more uncertainty related to growth.”
“For us, we think the cryptocurrency markets represent tremendous growth. It comes with volatility, certainly, but I think over the three to five years, we’d like that trajectory,” he added.
SkyBridge’s director of business development John Darsie noted that the firm’s growing focus on crypto was brought about due to a “huge drawdown in the credit portion” of the firm’s hedge fund manager portfolio.
Seeking out investments in stronger growth-oriented managers, the firm is now looking for allocations across many crypto assets and blockchain projects, with Darsie noting that the SkyBridge is “extremely bullish on the sector.”
“What we decided to do was a portion of that capital that was previously allocated to credit managers was invested directly into crypto assets like Bitcoin and Ethereum—but then also rotate capital into crypto-asset managers like Multicoin, Polychain, Pantera, people of that nature,” he said.
The bullish comments come just weeks after Scaramucci noted that the blockchain industry has a very bright future, but was concerned by some “absolutely despicable” U.S. politicians that could hamper the growth of the local sector.
Speaking on the SEC with Bloomberg however, Scaramucci seemed relatively optimistic that the agency will approve a spot BTC ETF once a few more factors fall into place, while also noting that its application denial in January was not necessarily “specific” to them.
“I think the SEC is taking the position that because the cash trading of Bitcoin is happening all over the world, that they don’t have a one-market clearing for all buys and sells. So they’re worried about price manipulation.”
“But over time, because of the transparency of the markets, I think they’re going to get more comfortable with it,” he added.