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Hedge fund Brevan Howard will “significantly expand” its foray into digital assets with the launch of a new unit focused on the industry, in the latest sign of how traditional financial companies are racing into the sector.
The European hedge fund, one of the largest in the world, said on Monday that it had set up a new unit dubbed BH Digital, which will manage cryptocurrencies and digital assets. It has appointed Colleen Sullivan, chief executive and co-founder of specialist cryptocurrency and blockchain technology firm CMT Digital, as head of the division.
Brevan Howard’s push deeper into crypto comes as big financial companies such as Goldman Sachs and Bank of New York Mellon and a number of hedge funds such as Marshall Wace and Renaissance Capital have sought to tap into the sector. The influx of blue-chip names highlights a growing appetite for digital assets among professional investors, which is putting banks under pressure to offer services around digital assets.
“Brevan Howard’s belief in the huge diversity of opportunities within the digital asset space and the significance of this to long-term macro investors is the reason we are delighted to welcome Colleen to the firm,” said Aron Landy, chief executive of the fund.
Traditional Wall Street firms have been rushing to create a strategy around cryptocurrencies as the size of the market boomed in the past 18 months. A survey in June showed that hedge funds intend to significantly increase their exposure to cryptocurrencies, but investors from traditional markets are facing stiff competition from digital asset specialists.
Brevan announced earlier this year that it would invest in cryptocurrencies through its main Master fund and it created a specialist vehicle for digital assets. The move to set up a dedicated unit for digital assets signals that the fund’s push into cryptocurrencies and its underlying technology has picked up pace.
Chicago-based Sullivan will be tasked with turning BH Digital into a key player for servicing professional investors in digital assets and crypto trading, as well as leading the fund’s “private and venture investment activities in crypto”. She will also chair the investment committee for a new vehicle that will focus on “highly compelling and disruptive technologies”.
Sullivan’s hire “underscores the firm’s commitment to rapidly expanding its platform and offerings in cryptocurrencies and digital assets”, Landy said.