Coinbase Gets its Crypto Hedge Fund One River Digital Asset Management
Posted on 03/03/2023
Cryptocurrency exchange Coinbase has acquired One River Digital Asset Management (ORDAM), digital asset manager and SEC-registered investment adviser, from One River Asset Management. ORDAM will transition to become Coinbase Asset Management (CBAM), and will operate as an independent business and wholly-owned subsidiary of Coinbase. With over US$ 130 billion of quarterly institutional trading volume and over US$ 50 billion of institutional assets on platform, Coinbase operates at the center of the institutional digital asset market. One River Digital Asset Management leverages Coinbase Prime to deliver differentiated investment solutions to institutions. ONE Digital SMA is a suite of digital investment strategies and indexes in a separately managed account (SMA) platform powered by Coinbase Prime and Coinbase Custody, a New York DFS qualified custodian. Coinbase Ventures was also an early investor in One River Digital Asset Management. Coinbase is reeling in a fall in cryptocurrency trading volume versus previous years.
Often custodial banks in the traditional asset classes like equities and fixed income has asset management businesses. Examples include Bank of New York Mellon Corporation with BNY Mellon Investment Management, State Street Corporation with State Street Global Advisors, and Northern Trust with Northern Trust Asset Management. However, cryptocurrency exchanges having “affiliated” hedge funds can stir controversy such as the cozy relationship between Alameda Research and FTX.
Brevan Howard Ties
Eric Peters will continue to serve as the CEO/CIO of One River Digital Asset Management as well as the CEO/CIO of One River Asset Management, an unaffiliated and independent business. Eric Peters founded One River Asset Management in 2013. One River Digital Asset Management will continue to operate as an independent entity under Coinbase, segregated from Coinbase’s trading and exchange businesses. In September 2021, One River Digital Asset Management had a Series A round which included Coinbase Ventures, Goldman Sachs, and Liberty Mutual Insurance. In 2020, Alan Howard’s Brevan Howard Asset Management acquired a 25% non-controlling equity stake in One River Asset Management. In 2022, Brevan Howard launched its first dedicated crypto fund with 10 teams of portfolio managers called BH Digital Multi-Strategy Fund. BH Digital is Brevan Howard’s unit dedicated to the global macro firm’s crypto investments. BH Digital Multi-Strategy Fund invests in both liquid cryptocurrencies and takes venture capital-style stakes in private blockchain companies.
