Galaxy asset management unit reaches US$1.2bil in size

TORONTO: Billionaire investor Mike Novogratz’s Galaxy Digital Holdings Ltd has said its asset management unit has grown to about US$1.2bil after launching new products, including a bitcoin mutual fund in partnership with Canada’s CI Financial Corp.

The company, based in New York but listed in Toronto, said in a statement it expects to report income of US$325mil for the fourth quarter after the value of bitcoin and other holdings soared. Galaxy said it disclosed the preliminary results “given the material change in the operating environment of the cryptocurrency and digital sector” since it reported its third quarter.

Galaxy Digital is a financial firm that does asset management, trading, investment banking and other activities, with a focus on digital assets, cryptocurrencies and blockchain. Novogratz is trying to place it in the centre of an explosion in investor interest in cryptocurrencies and retail funds that hold them.

Galaxy’s trading desk is one of several providing bitcoins for the Purpose Bitcoin Exchange Traded Fund (ETF), the first-ever approved in North America, which began trading on the Toronto Stock Exchange last week. Galaxy Digital will also act as a sub-adviser on a new bitcoin ETF that CI Financial has also filed to launch.

“Even as late as June and July of last year, people were not positive this was a real space, ” Novogratz said by telephone. “Now the question is, how much exposure should I have?”

Galaxy’s asset management division includes venture funds and crypto funds, including those traded on exchanges. Assets, which were US$1.18bil as of Feb 19, have grown 45% since the end of December after more than doubling in the fourth quarter, the company said.

Novogratz said he plans to add about 50 people to the 126-person company. Galaxy Digital has a market value of C$5.5bil (US$4.4bil), up from C$382mil a year ago.

Some mainstream financial institutions, such as Morgan Stanley’s Counterpoint Global investment management unit, are considering making bets on bitcoin or are making it easier for their clients to do so. ─ Bloomberg

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