Billionaire Alan Howard is making ‘massive moves’ into crypto

British billionaire Alan Howard is going all in on crypto. 

The 57-year old rose to fame as co-founder and CEO of the hedge fund Brevan Howard. Formed in 2002, the company became one of the world’s largest macro hedge funds – with some $40 billion under management by 2013. Howard stepped down as CEO in November 2019.

Since then, he has turned his attention to cryptocurrency. Howard first established a company called Elwood in 2018. Elwood, now known as Elwood Technology, began as an asset management firm focused on building indices offering investors exposure to blockchain and crypto.

The Block can reveal, however, that the business has recently pivoted – transitioning from asset manager into software business. According to a person familiar with the matter, Elwood now styles itself as “a one-stop technology platform to enable institutions such as neobanks, fintechs, and asset managers to access and trade crypto assets across exchanges and liquidity providers with a single API.” 

In the past six months, Howard has also been investing heavily in startups and funds in the wider crypto sector.

“He’s making massive moves into crypto and not just crypto, but also crypto asset management,” said one source whose company has raised money from Howard.

So far, Howard has nine crypto-related investments in the public domain:

• In December 2020, Bloomberg revealed Howard as a backer of One River Asset Management, a hedge fund specializing in volatility bets that had quietly bought more than $600 million in crypto.
• In February 2021, Howard participated in a $15.5 million raise by British crypto payments startup Bottlepay.
• In March 2021, Howard led a $25 million raise by Komainu, a Jersey-regulated crypto custodian set up by Nomura, Ledger and CoinShares. 
• The Block revealed in March 2021 that Howard is the fourth largest shareholder in CoinShares, Europe’s largest crypto asset manager. At that time, his shareholding was worth around $61.5 million.
• In March 2021, Howard and fellow billionaire Christian Angermayer (through his investment firm Cryptology Asset Group) led a $30 million Series B fundraise by Cologne-based neobroker Nextmarkets, which offers trading in stocks as well as cryptocurrencies.
• In May 2021, Block.one unveiled plans for a new crypto exchange named Bullish Global which claimed to be backed by $10 billion in funding. That headline figure included a $300 million strategic investment round which Howard led alongside a number of other billionaires, including Angermayer and the investment firms of Peter Thiel and Mike Novogratz.
• Howard participated in a $30 million raise by Canadian crypto lender Ledn in May 2021.
• Howard made a $4 million strategic investment in Hong Kong-based Kikitrade on June 10, 2021.
• On June 11, Howard led a $25 million investment in Copper, the London-based crypto custodian, extending a $50 million Series B raise that was announced in May. 

It is not clear which entity Howard is using to make equity investments in the crypto space. But a person familiar with the matter said it is neither Elwood nor Brevan Howard. 

From his public investments alone, it is obvious that Howard is backing a wide array of emerging infrastructure players in the still-nascent crypto market. In the nine bets outlined above, he has backed: a hedge fund, a payments firm, two custodians, an asset manager, a brokerage, two exchanges, and a lender.

“He’s real serious. He hates missing out on anything,” said a source who has worked closely with Howard. 

Another person close to his operation said, “Alan is a private investor and just looks for good investments in the crypto space wherever they may be because he believes in it.” 

The same person, asked whether Howard had invested directly in bitcoin or any other cryptocurrency, pointed out that Brevan Howard has announced investments in a range of digital assets. Elwood, they added, used to invest directly in crypto but is now “purely a technology company.” 

Network effects

Based on his investments in the sector, it’s clear that Howard enjoys the company of his fellow billionaires. Angermayer, in particular, seems to be a trusted partner.

In an interview shortly after its $30 million Series B round, Nextmarkets co-founder and CEO Manuel Heyden told The Block that Howard “was introduced by Christian Angermayer, who led the round together with Alan.”

“He understands the business model pretty well, and there is definitely a new category which is neobrokerage which is emerging in the EU, and he sees there is a huge opportunity to participate in this category,” Heyden added. The term neobroker refers to trading apps that allow consumers to trade on the stock market at the touch of a thumb, with relatively small amounts of money.

One person with knowledge of Howard’s investments in the sector said, “There are many sources for deals and Alan has done many.” 

Angermayer’s crypto investments are channelled through Malta-based investment firm Cryptology Asset Group, which was founded by his family office Apeiron Investment Group. Cryptology — which itself counts Galaxy Investment Partners CEO Mike Novogratz, another billionaire, as an adviser — trades on several German stock exchanges including Börse Düsseldorf, Gettex and Tradegate. Angermayer was contacted for comment but did not respond by press time. 

One of Howard’s most recent bets, which he placed as a participant in Ledn’s $30 million raise, is an emerging markets play.

Speaking shortly after the raise was announced, Ledn’s co-founder and chief strategy officer Mauricio Di Bartolomeo said the startup aims to make bitcoin-secured loans “palatable” for customers living in countries like Mexico and Venezuela. That means taking deposits from institutional investors and making dollar-denominated loans (using bitcoin as collateral) of as little as $500 a time.

“We’re not making a huge amount of money on these loans, but we can do them efficiently,” said Di Bartolomeo.

He added that Howard was introduced to the business by White Star Capital, the venture capital fund which led Ledn’s $2.7 million round in February. White Star announced the close of a new $50 million digital assets investment fund in May. The firm manages some $700 million in total. 

“They [White Star Capital] connected us with Alan. Alan really liked what we were building. We really liked what they could bring to our investor base,” said Di Bartolomeo. “And we do plan to dive deeper into Europe.”

Howard also came to invest in Bottlepay’s $15 million seed raise by way of introduction. 

For Bottlepay, the link was Chris Tuohy, a former “star trader” at Tudor Investment Corporation, the investment firm founded by billionaire hedge fund manager Paul Tudor Jones. 

“Alan seeded Bottlepay with Chris Tuohy,” said a person familiar with the matter. 

Like Howard, Jones has become a bitcoin believer, and has described the asset as a hedge against inflation. Jones’s former lieutenant Tuohy is an investor in and director of Bottlepay, as well as being involved in a strategic capacity, according to a spokesperson for the startup. 

Bottlepay, which formally launched in February, allows customers to make payments in crypto and fiat currencies using the Lightning Network, a “layer 2” payment protocol. The startup recently expanded into 36 countries in Europe. 

“We’ve met many times over the years and Alan’s been fantastic,” said Peter Cheyne, co-founder of Bottlepay. “He’s fiercely intelligent, he really gets the market. He’s doing some amazing things within it and from my perspective as a founder and a builder he’s opened up his whole infrastructure portfolio to allow us to build faster and better.”

By way of example, Cheyne pointed to Bottlepay’s integration with the bitcoin liquidity product developed by Elwood. 

“They have a full API stack for being able to access multiple exchanges and liquidity providers through a single product,” he said. 

The network effects of Howard’s emerging crypto empire are only likely to increase the more money he invests in the sector. And after making two more investments this week alone, it appears he may be picking up the pace.