The hedge fund-of-funds units of both JPMorgan and UBS are for the first time exploring backing portfolio managers that actively trade cryptocurrencies, according to three people familiar with the matter.
A spokesperson for JPM declined to comment. Per a UBS spokesperson: “In the normal course of business on behalf of our clients, we regularly engage with a broad range of managers on the latest developments, including emerging asset classes and new strategies.”
The development marks the first time both units, which allocate billions of dollars each year to hedge fund managers that run a broad swatch of strategies, are seriously considering backing crypto managers. It’s unclear whether either business — known at UBS as Hedge Fund Solutions — has written a limited-partnership stake to an outside manager.
“JPM, UBS exploring the space, sure,” one source who has talked to both parties said. “But the real news here is that there looks like there’s some actual momentum this time around” when it comes to actually backing one of the portfolio managers the asset managers have been chatting with.
UBS Hedge Fund Solutions ranks among the world’s largest investors in hedge funds, overseeing $22.4 billion of assets under management on behalf of its wealthy clients as of year end 2020, according to the latest data available. JPM’s U.S.-based hedge fund unit, JPMorgan Alternative Asset Management, oversaw about $8 billion of assets under management at year end.
Due-diligence conversations have picked up between representatives from the asset management divisions of the two banks and portfolio managers touting investment strategies ranging from DeFi plays to NFTs to machine-learning Bitcoin trading models.
They join a growing list of blue-chip Wall Street players looking to not be left behind when it comes to generating alpha on the crypto wave. Among them, as previously reported by Crypto Investor, are a growing number of multi-strategy operators: Ari Glass’s Boothbay Fund Management; Dmitri Balayasny’s Balyasny Asset Management; Izzy Englander's Millennium Management and Steve Cohen’s Point72 Asset Management. The latter is searching for a head of crypto.
Another JPMorgan unit is preparing to launch an internally managed Bitcoin fund, CoinDesk reported earlier this year.
The hedge fund-of-funds units of both JPMorgan and UBS are for the first time exploring backing portfolio managers that actively trade cryptocurrencies, according to three people familiar with the matter. Subscribe for full article
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