Brevan Howard Asset Management raises $1 billion for subsidiary BH Digital.
BH Digital, a digital asset subsidiary of Brevan Howard Asset Management, successfully raised $1 billion from institutional investors. The crypto-focused arm was launched in 2021. It hasn’t fully used the totality of its capital yet due to a lack of liquidity.
With the latest funding, which is the largest in crypto history, BH Digital can deploy up to $1.5 billion – this figure is expected to rise. The funding is open for further capital, wherein investors must commit a minimum of $5 million. It has suffered a setback, a 4 to 5% loss until June. The huge funding comes at a time when the crypto market is facing an ongoing slump. Bitcoin and Ethereum, the top two cryptocurrencies, are trading at 67.3% and 67.2% respectively from their all-time highs.
Brevan employs a multi-manager and multi-strategy approach, putting limited-partner capital to work through both venture capital-style plays and liquid cryptos. Teams of portfolio managers structured in pods implement strategies. It has more than 20 external blockchain engineers working under full-time retainers. Brevan has $23 billion across a wide range of asset classes. The firm acknowledges that cryptocurrencies are often akin to small- or medium-cap equities. It knows that building a sizeable long or short leg in risky assets is tricky to pull off in a quick fashion without hitting its acquisition price in a meaningful way. Brevan has an initial capacity of up to $1.5 billion and it’s expected to rise as the unit adds investment professionals and brings in fresh sets of strategies to the market.
The firm is open to external capital.