A trio of former Citigroup executives who left the bank in March have formed Motus Capital Management, a crypto hedge fund.
The firm says it wants to make it easier for high-net worth individuals to bet on cryptocurrencies.
Alex Kriete, Greg Girasole and Frank Cavallo are seeking to raise $100 million for a pair of actively managed hedge funds that will focus on digital assets, the three said via Bloomberg.
Kriete says clients are having difficulty identifying what’s “scammy” vs “real investment opportunities.”
I know retail investors are going to have a lot of opinions on this.
Let’s break it down some more.
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Who are the crypto hedge fund trio?
Kriete and Girasole left Citigroup less than a year after being picked to oversee a new digital-assets group inside the Wall Street giant’s wealth-management division.
Before that, Kriete managed $3 billion and Girasole $5 billion for Citigroup private-bank clients.
Cavallo was most recently an investment counselor at Citigroup, where he oversaw $8 billion of assets and held roles inside the firm’s cross-asset sales and trading division according to Bloomberg.
All three are investing their wealth in Motus Capital Management.
This is one of the first crypto hedge funds to emerge in the crypto space.
And where there’s a hedge fund, we already know there are bets towards the downside.
Motus Capital Management to offer growth and income funds
The crypto hedge fund says it plans to offer clients growth and income funds.
The growth fund will focus on investing in tokens with smaller market capitalizations that larger funds find it harder to invest in, Cavallo said.
“We think we hit the sweet spot,” he said. “With assets like Bitcoin and ETH, clients can do that on their own. They don’t need to pay someone to buy Bitcoin.”
Crypto hedge funds are relatively new and only have about $3.8 billion in assets under management globally according to a report by PwC.
Less than half of all crypto hedge funds have assets under management of more than $20 million, PwC found.
I expect this side of the industry to exponentially grow this decade.
Citadel’s Ken Griffin said he would provide crypto opportunities to his clients if the asset class became strictly regulated.
Do you think hedge funds should enter the crypto space?
Who’s to say the SEC won’t begin to establish regulations to attribute to hedge funds over retail investors?
Similar to the stock market.
Investors are going to want to keep a close eye on the development of such regulations and ensure the crypto market’s integrity doesn’t get broken.
The crypto market, though a highly speculative market, has been accurately based on supply and demand unlike the stock market where many institutions have blatant power over retail investors.
Let me know in the comment section below if you’d like me to cover topics regarding crypto regulation.
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