For those wondering why money-managing entertainer, Anthony Scaramucci, who briefly played Donald Trump spokesman, before aggressively and hilariously turning on his former boss, and has also played a fund-of-funds manager (for a longer period of time), recently decided he needed even more airtime by taking part in a Fox “special forces” reality show, it may have to do with the woeful performance of his SkyBridge Capital (which he came this close to selling to a since-imploded Chinese conglomerate several years ago) which according to Bloomberg lost 39% last year in its biggest funds after wrong-way bets on cryptocurrencies and now-bankrupt FTX, spurring investors to ask the firm to return more than half of their money.
SkyBridge’s largest fund, with $1.3 billion of assets at the end of the third quarter, had one of its worst months of 2022 in November, when FTX declared bankruptcy, Bloomberg reported citing people familiar with its performance.
Investors, who are now limited to making two withdrawal requests each year, asked to pull 60% of the fund’s capital for the Sept. 30 redemption period, but SkyBridge only returned 10%, according to a January regulatory filing. Previously, the firm allowed four redemption requests per year and said it would return as much as 25% of the cash each quarter.
The flamboyant 59-year-old Scaramucci, and FTX co-founder and alleged megafraud, Sam Bankman-Fried, had built a curiously close relationship over the past two years. Beginning in 2021, SkyBridge bought equity in the closely held crypto exchange, with the most recent purchase last August. The next month, another entity controlled by Bankman-Fried acquired 30% of SkyBridge.
The ensuing events, well known to all, did not lead to a surge in confidence in Scaramucci’s ability to distinguish flair from fraud, and more than half of his investors decided they had had enough… and that’s when the gates came down.
Various cryptocurrencies accounted for 28% of the SkyBridge fund, while private crypto-related companies, including its FTX stakes, comprised 14%.
Aside from its turbulent exposure to crypto, the fund – which started of as a FoF, also also invests in traditional hedge funds. Steve Cohen’s Point72 Asset Management and Izzy Englander’s Millennium Management, were two bright spots in the portfolio, with both firms up about 12% last year. Together they accounted for about 24% of fund assets as of September.
Fri, 01/27/2023 – 10:45
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Author: Tyler Durden
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