TradFi Hedge Fund Hunting Hill Starts Crypto Arm

Hunting Hill Global Capital, a New York-based traditional finance hedge fund with $364 million in assets under management as of a March filing, announced on Wednesday that it will starts its digital asset affiliate, Hunting Hill Digital (HHD), which is backed by an undisclosed investment from early-stage venture capital firm BaseLayer Ventures.

Hunting Hill Digital’s first product will come later this year with the launch of the Crypto 25 Fund with an initial $20 million to $25 million in assets under management, according to a source familiar with the matter.

HDD is partnering with anchor investor TIFF on the fund, which will provide institutional investors with exposure to an actively managed strategy focused on the top 25 cryptocurrencies by market cap, liquidity and performance, the source said.

The new digital asset unit comes during a particularly turbulent and ongoing bear market that has widely slowed investments in the space. Hunting Hill cites the interest of institutional investors for the move, and the future potential of moves made during a downward cycle

“We are contrarian traders by nature and we look for these types of distressed dislocations and believe that there is opportunity when those occur,” Adam Guren, co-founder of HHD and chief investment officer of Hunting Hill, said during an interview with CoinDesk. “These are the times that we want to be putting seeds in the ground to watch them in the future.”

HDD will eventually manage all of Hunting Hill’s digital asset products once that transition is completed, including the Hunting Hill Crypto Opportunities Fund. The affiliate plans to explore tokenization and non-fungible token (NFT) asset management, and will be managed by Guren and co-founder Sonny Dozier.

Established in 2012 as an asset manager targeting institutional investors, Hunting Hill moved into digital assets in 2016. By 2021, the firm had about $3.5 billion of its balance sheet dedicated to trading of digital assets and their derivatives. Hunting Hill started to reduce that exposure due to red flags about counterparty risks in the industry, said Guren, which meant the firm didn’t have exposure to the bankruptcies and insolvencies that rocked the industries.

The existence of Hunting Hill Digital was first reported by Blockworks last December. The new affiliate experienced some early controversy when CNBC reported that three former executives of Genesis – the crypto lender and CoinDesk sister company that filed for bankruptcy earlier this year – were claiming to be HDD co-founders and touted a Bessemer Ventures investment, which the investor denied.

Hunting Hill later told The Daily Beast that the firm had discussions with two of the ex-Genesis employees, but they had never started employment. The third, Martin Garcia, was HDD’s chief investment officer before his departure on May 1, a source told CoinDesk.