Brevan Howard, a European hedge fund asset management firm, has announced extending its reach into the cryptocurrency sector by forming a new crypto-focused division called BH Digital.
Brevan Howard, one of the world’s largest hedge fund companies and popularly known for its bets on macroeconomic trends, is now taking direct exposure with cryptocurrencies.
The development highlights the move by traditional financial management firms to gain exposure to the quickly growing market.
Brevan Howard hedge fund firm has stated that it is creating BH Digital, a new unit that will manage cryptocurrencies and digital assets.
The hedge fund company further mentioned that it has hired Colleen Sullivan, a co-founder and former CEO of the digital arm of trading firm CMT, to oversee the funds’ private and venture investments in cryptocurrency.
Last month, Sullivan stepped down as CEO of CMT Digital, the investment arm of Chicago proprietary trading company CMT Group.
CMT Digital, a specialist cryptocurrency and blockchain technology company, had invested in many large cryptocurrency companies, like crypto-friendly Silvergate bank, crypto derivative platform ErisX, crypto venture capital pioneer Polychain capital, and crypto leader BlockFi.
Hedge Fund and Cryptocurrencies
In April, Brevan Howard announced that it was planning to invest in cryptocurrencies.
During that time, the company stated plans to allocate up to 1.5% of its main hedge fund (worth $5.6 billion during that time) to direct exposure in crypto assets, meaning that the firm would invest $84,000,000 into cryptocurrencies.
Brevan also stated that its cryptocurrency fund would have a diverse portfolio, focusing on several crypto assets besides Bitcoin (BTC) and Ether (ETH).
A survey done by PWC and Elwood Asset Management indicates 47% of traditional hedge fund firms have entered or plan to enter the cryptocurrency market. The research surveyed 39 hedge fund firms in the first quarter this year with a total of $180 billion in assets under management.
The survey also identified that the total assets under management for crypto-based hedge funds had nearly doubled from $2 billion in 2019 to almost $3.8 billion in 2020.
Evidence shows that hedge fund firms have increased their search for hiring crypto talents to help them manage their cryptocurrency investments.
Image source: brevanhoward.com