Media: Anthony Scaramucci’s SkyBridge Capital refuses to return money to cryptocurrency hedge fund investors

Withdrawal options were limited two years ago amid the cryptocurrency market downturn

12.07.2024 - 10:45

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2 min

Last updated on Aug 6, 2024

What’s new? SkyBridge Capital, led by Anthony Scaramucci, is still preventing investors from withdrawing from the cryptocurrency-focused hedge fund despite rising returns. SkyBridge rolled back withdrawal options two years ago amid the crypto winter when the fund suffered heavy losses and investors sought to recover their assets.

Material by Bloomberg

What else is known? Hedge funds typically limit redemptions only when they have illiquid investments and redemptions could disadvantage remaining investors. Others limit share redemptions amid underperformance to preserve capital.

SkyBridge’s recent strong performance, including 26% first-quarter growth, has barely offset previous losses, Bloomberg analysts report. The five-year annualized return was less than 1% as of March 31, and assets under management were valued at $2 billion, well below the $9 billion reported in 2015.

SkyBridge had previously invested in other asset managers but switched to cryptocurrency starting in 2020. At the end of Q1, its hedge fund assets were 57% in cryptocurrencies and other digital assets.

Investors owning about 70% of the fund’s shares again asked for a refund in the last redemption period, which also ended in March. However, the fund redeemed only 7% of the securities.

Notably, bitcoin posted a 150% return from March 2023 to March 2024, and the SkyBridge hedge fund added 46,4%. Nevertheless, customers are still having trouble getting funds.

According to Bloomberg, 70% of the fund, whose valuation is $1,6 billion, is owned by wealthy clients of investment bank Morgan Stanley.

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