Valkyrie Investments, the firm behind one of the market's bitcoin futures-tied exchange-traded funds, is launching a new hedge fund that aims to profit from dislocations in the fast-growing decentralized finance ecosystem.
Housed under Valkyrie's crypto division, the new fund will be led by Will McDonough, a Wall Street veteran who is best known for being Tom Brady's "handler" and business manager. The so-called On-Chain DeFi Fund will actively move in and out over hundreds of coins in the DeFi market based on the firm's own proprietary systems, according to McDonough, who is also a vice-chairman at Valkyrie.
The fund is expected to go live later this month. "We've built an unbelievable interface that gives us real-time data across 13 different blockchains for 250 tokens," McDonough said.
McDonough said of the firm's strategy: "We find a dislocation, take an exposure to the token, wait for the dislocation to close. While we are waiting, we are going to stake."
McDonough has been active in the crypto market since 2017. His career spans several industries and startup efforts, including a crypto project known as iCash as well as Atlas Mara, a company McDonough founded with former Barclays CEO Bob Diamond. Atlas Mara is a holding company with numerous positions in banking and financial services operations across Africa.
Prior to Atlas, McDonough worked with an investment team within Goldman Sachs that managed $17 billion. The Boston native is also known for his management company MMG, which worked with Tom Brady, Nelson Mandela's estate and Gisele Bundchen.
In a sense, the new fund represents an expansion of Valkyrie's suite of products, which offer passive exposure to cryptocurrencies like Polkadot, Bitcoin, Tron, and Algorand. The firm's bitcoin ETF began trading on Nasdaq at the end of October.
Across the market, crypto firms are expanding their presence in asset management with giants such as Fidelity eyeing the launch of a spot bitcoin ETF. Galaxy, meanwhile, manages more than $3 billion through its asset management arm. In July, its Vision Hill units closed its venture fund of funds, which manages more than $30 million.
As for Valkyrie's new fund, McDonough said the firm has raised tens of millions thus far from Valkyrie's executives and other accredited investors. In total, he expects to raise $100 million.