Boothbay Fund Management has been investing in cryptocurrency plays for going on a decade, sources said. The previously unreported news comes as the longtime institutional allocation firm is growing its crypto book alongside other lines of its business. The firm declined to comment.
The New York-based Boothbay, run by founder Ari Glass, has held multiple conversations with portfolio managers running non-directional crypto trading strategies this year, according to three sources with knowledge of the matter. The sources were granted anonymity to discuss sensitive business dealings.
Among the people Involved in those conversations: Boothbay risk head Shane Burn. That appears to indicate Boothbay is looking to write another check to a crypto manager soon. Sources said the firm has two to three active allocations to crypto managers on the books now – which would rank highly among multi-strategy asset managers eyeing crypto investments.
Among them: Balyasny Asset Management, Millennium Management and Point72 Asset Management. The third is looking now to hire a head of crypto for the firm, we reported last week.
Glass, a family office and Wall Street vet, runs about $1.6 billion of assets under management. The model is for Boothbay to hold that amount, submitted by its limited-partners, on its own balance sheet and write checks to promising outside managers, many of whom run capacity-constrained and off-the-run strategies.
The firm currently holds limited-partnership stakes in about 125 portfolio managers — so crypto is still an extremely small portion of a complex investment book that oversees strategies ranging from equities, debt and commodities.
The firm also runs a so-called first-loss program. How that works: Managers put up a portion of their own money and are responsible for the first investment losses they incur under their strategy, up until a specified threshold.
Glass started backing crypto managers via the first-loss model and has since written other checks, without the first-loss requirement, to highly pedigreed crypto managers.
“It becomes a way to really make sure a manager can risk control,” one source, who has spoken to Boothbay this year, said of the firm’s first-loss program. “And that obviously can make sense for crypto.”
Boothbay as a firm has been growing. Some indications: Inking a university endowment and a pension to an LP deal last year, the first such institutional investors to back Boothbay. The firm’s overall headcount stands at 19 internally, not counting outside traders it taps to manage its money.
Boothbay Fund Management has been investing in cryptocurrency plays for going on a decade, sources said. The previously unreported news comes as the longtime institutional allocation firm is growing its crypto book alongside other lines of its business. The firm declined to comment. Subscribe for full article
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