Man Group Plc is close to starting a dedicated cryptocurrency hedge fund, delving deeper into a market that’s reeling from the collapse of exchange operator FTX.
(Bloomberg) — Man Group Plc is close to starting a dedicated cryptocurrency hedge fund, delving deeper into a market that’s reeling from the collapse of exchange operator FTX.
The world’s largest publicly-traded hedge fund firm has been developing the strategy led by money manager Andre Rzym for months, according to people with knowledge of the matter. The firm’s computer-led trading unit AHL is planning to start the fund as soon as the end of the year, said the people, asking not to be identified because the plan is private.
Man Group already trades cryptocurrency futures within AHL and will start the dedicated fund only after assessing counterparty risks, one of the people said. Chief Executive Officer Luke Ellis said last year the firm was weighing up whether crypto strategies were scalable.
A spokesperson for Man Group declined to comment.
The move comes as the Nov. 11 collapse of FTX and sister trading house Alameda Research continues to reverberate through the financial industry. It follows earlier high-profile implosions of crypto outfits and comes amid a painful bear market in many digital tokens.
Hedge funds including Tiger Global Management, Third Point and Altimeter Capital Management participated in funding rounds for FTX, whose liquidators have this week flagged non-existent oversight and the misuse of client funds. FTX’s demise helped send the price of Bitcoin down 23% in a week, before the digital currency recovered some ground.
Volatility like this could be good news for hedge funds such as Man Group, which try to make money in rising as well as falling markets. Man’s crypto fund is likely to be tiny compared to the $138.4 billion it ran at the end of September.
Rzym, who is a partner at Man AHL, is tasked with identifying new alternative markets and developing trading models. He has worked on the firm’s expansion into securities such as interest rate swaps, credit default swaps, cash bonds and catastrophe bonds. He has been at the firm since 2005.
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