Last year was quite challenging for Brevan Howard Digital; the crypto investment division, which is part of an asset management company with a scale of $34 billion, faced significant pressure.
The flagship products of this department, Brevan Howard Digital Asset and fund, are multi-strategy funds that invest in both listed and unlisted companies as well as digital assets. Last year, they incurred a loss of nearly 30%. Gautam Sharma, who has been leading this business since its establishment in 2021, has resigned. The asset size of this business also decreased from $2.5 billion at the beginning of the year to approximately $2 billion by the end of summer.
Today, under the leadership of former Coinbase executives Chris Rayner - Cook, this digital asset team is introducing new talents, launching new strategies, and attracting the interest of sovereign wealth funds. Brevan believes that the goal is to seize the structural changes that are taking place in the crypto and blockchain industries.
Rayner-Cook said in an interview with Business Insider: 'There are more opportunities in the field of blockchain applications, more opportunities in the stock market, and the company will also have more opportunities in the future.'
His judgment on industry changes is that this field has evolved from a basket of assets driven by broader macro trends to a market with clear winners and losers. Rayner-Cook states that active managers who wish to achieve excess returns should be able to find opportunities in the upcoming “differentiation,” while the management of Brevan expects their platform to help fund managers seize these opportunities.
The digital asset sector has shifted from the "installation phase" to the "application phase": in the past, companies and industry advocates focused on building infrastructure and explaining the technology, but now it is mainstream enterprises that are using this technology, without necessarily defining themselves as crypto companies or blockchain companies. He cited examples that this year, Visa, Mastercard, and PayPal all launched new stablecoin products.
Rayner-Cook indicates that the department's broader range of investable assets will expand rapidly, especially in terms of listed stocks. Currently, there are already over 80 listed stocks that meet its criteria, but he expects that this number to more than double over the next 18 months as more companies adopt encryption technology.
He said, "We will expand as the set of opportunities grows."
Therefore, Brevan has already been expanding its investment lineup.
The company recently appointed Omar Kanji as the head of growth investments; Kanji was previously a partner at the venture capital firm Dragonfly. In addition, Jason Li, who has also been an investor in Millennium and Man Group, has joined the team as a portfolio manager, responsible for trading listed stocks related to the digital assets sector.
A person familiar with the company said that as of the end of September, the flagship fund of that department had fallen by 3.8% this year, while Bitcoin had fallen by more than 4% during the same period. The person also mentioned that the company launched a strategy focusing on stablecoins in February, which has risen by over 35% this year.
The person mentioned that changes within the industry and within Brevan have also attracted the attention of large institutions, and sovereign wealth funds have seen capital inflows this year. The company refuses to disclose the specific amount of new capital.
For many years, Brevan has been one of the most renowned asset management companies in the digital assets sector, partly due to the personal interest of its billionaire founder, Alan Howard, in encryption and blockchain technology. The company's goal is to become the preferred choice for large institutions seeking to enter this field, and the management of Brevan believes that this department is now ready to take off.
Rayner-Cook said, "The original intention of designing this platform is to be global, extensive, and flexible."
"This field has never been more exciting than it is now."
