Valmar Capital, an emerging U.S. cryptocurrency hedge fund, focuses on uncorrelated returns while implementing a multi-strategy, absolute-return approach. As PricewaterhouseCoopers counted more than 300 crypto hedge funds in 2022, Chief Investment Officer Jonathan Man shared insights on the fund’s approach to asset selection and the challenges of starting, scaling, and running a fund.
I want to make the distinction that for us, our job is making allocations and determining our portfolio mix across strategies, Man said. Allocating capital with a focus on strategies rather than assets can work to provide diversified returns while limiting exposure to general market swings.
Man also voiced concern the Federal Open Market Committee has raised rates too much and mentioned low liquidity and the lack of the ability to borrow as factors that need to evolve for crypto to move meaningfully higher. He offered a note of optimism on regulation, expecting clarity eventually.
Valmar’s story is just one of many, but the challenges of starting, scaling, and running a fund are felt by all who attempt to do so. Institutional funds with Valmar’s model often serve multiple client bases, including investors and traders. The evolution of digital asset investment management appears to be running in concert with the evolution of the assets themselves, making the future of crypto hedge funds an interesting one to watch.