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Hedge fund firm Brevan Howard has launched its first dedicated crypto fund with 10 teams of portfolio managers and bold fundraising aspirations, according to two people familiar with the matter.
The flagship vehicle, BH Digital Multi-Strategy Fund, started trading earlier this month with a sizable amount of internal capital, sources said. The plan is to start broadly raising outside money in the second quarter — and expectations are that fundraising haul would amount to at least several hundred million dollars and perhaps more than $1 billion.
Sources were granted anonymity to discuss sensitive business dealings. A spokesperson for Brevan Howard declined to comment.
The fund is the inaugural vehicle of BH Digital, the new Brevan Howard unit dedicated to the global macro firm’s crypto investments. The division now has 25 employees overall and is scaling. It represents one of the largest — if not the largest — commitments by a legacy asset manager to digital assets.
“Brevan is making an absolutely massive push into crypto,” one source said.
BH Digital Multi-Strategy Fund invests in both liquid cryptocurrencies and takes venture capital-style stakes in private blockchain companies. BH Digital is looking to hire additional portfolio managers in addition to the 10 it already has, with each team typically supported by analysts.
“(The firm’s) gone out and got the picks and shovels, but they need to be able to execute that type of strategy,” one source said.
The firm started trading crypto via its other funds last year.
Indications are that Brevan Howard’s marketing staffers have already begun to gauge the interest of the firm’s institutional limited-partners in the new fund.
“My understanding is they’ve just been making the internal calls to the large allocators that already have a Brevan product,” one source said.
Added another source: “With their network already, they’re going to do a great job of cross-selling. They’re going to have a massive raise in the second half of this year.”
The firm oversaw about $18 billion of assets under management in November 2021, the most recent figure available. Brevan Howard recently redeemed 15% of its $7 billion BH Alpha Strategies Fund from investors, Bloomberg reported — asking clients to lock up their cash for longer and mirroring a trend by its peers.
Co-founder Alan Howard has invested his personal wealth in cryptocurrencies for years, including backing crypto hedge fund firm One River Digital Asset Management.
Jason Cummins, Brevan Howard’s head of research and chief US economist, joined One River’s advisory group earlier this month.