Two former Credit Suisse managing directors are planning a $150 million capital raise for their cryptocurrency hedge fund, according to sources familiar with the matter. The fund, which focuses on digital assets, aims to attract institutional investors amid a resurgence in crypto markets.
Fund Background and Strategy
The hedge fund, launched in 2021 by the ex-Credit Suisse executives, employs a multi-strategy approach including long/short and market-neutral tactics. It has already deployed capital across various cryptocurrencies, with a focus on Bitcoin and Ethereum, as well as emerging DeFi tokens.
The $150 million target represents a significant expansion for the fund, which currently manages around $50 million in assets. The capital raise is expected to close by the end of the second quarter, pending regulatory approvals.
Market Context and Investor Interest
The fundraising comes as institutional interest in digital assets rebounds following a prolonged bear market. Bitcoin has surged over 50% year-to-date, and Ethereum has gained more than 30%, driven by expectations of spot ETF approvals and regulatory clarity.
According to a report by CoinShares, digital asset investment products saw inflows of $1.1 billion in the first quarter of 2024, the highest quarterly level since late 2021. This has encouraged fund managers to seek fresh capital.
Team and Track Record
The fund is led by two managing directors who spent over a decade at Credit Suisse, one specializing in structured products and the other in macro trading. They have assembled a team of 10 professionals, including quantitative analysts and blockchain engineers.
“We believe the current market environment presents a generational opportunity for active management in digital assets,” said one of the co-founders. “Our track record of navigating volatility and generating alpha positions us well to capture this opportunity.”
The fund has generated net returns of approximately 15% annually since inception, outperforming benchmarks like the Bloomberg Galaxy Crypto Index, which has returned about 10% over the same period.
Competitive Landscape
Several other crypto hedge funds have also announced capital raises in recent months, including Pantera Capital and Multicoin Capital, as the sector attracts renewed investor appetite. However, the ex-Credit Suisse team differentiates itself by focusing on risk management and institutional-grade compliance.
The fund plans to use the new capital to expand its trading strategies, invest in proprietary technology, and deepen research into blockchain protocols. It also aims to launch a separate fund for accredited individual investors later this year.
Regulatory and Risk Considerations
Despite the positive outlook, the fund faces regulatory uncertainties, particularly in Europe and the US, where crypto regulations are still evolving. The team has engaged legal advisors to ensure compliance with all applicable laws.
“We are committed to operating within regulatory frameworks and have already implemented robust KYC and AML procedures,” the co-founder added. “Our investors expect nothing less.”
The capital raise is targeted at family offices, pension funds, and endowments, with a minimum investment of $1 million. The fund charges a 2% management fee and a 20% performance fee, standard for the industry.
