Anthony Scaramucci's SkyBridge Capital has restricted client withdrawals from its crypto-focused hedge fund, even though the fund's performance has improved significantly.
Scaramucci's SkyBridge Limits Customer Exits Despite Crypto Ripple
Investors who own about 70% of the fund's shares had requested withdrawals during the last period ending in March, according to a regulatory filing.
However, the fund, which carried out the withdrawals through a tender offer, repurchased only about 7% of the requested shares.
While Scaramucci, 60, declined to comment, he has previously said the fund's structure allows him to limit withdrawals by working within the guidelines in the fund's prospectus.
SkyBridge began limiting withdrawals two years ago, during the “crypto winter” that saw significant losses and investor withdrawals.
Cryptocurrencies have since rebounded, with Bitcoin rising nearly 150% in the 12 months ending March 31, with the SkyBridge fund posting a 46.4% gain. Despite this recovery, many customers remain eager to withdraw their investments.
Hedge funds often impose withdrawal limits, known as gates, to protect remaining investors from the impact of liquidating hard-to-sell investments or to preserve capital during periods of underperformance.
SkyBridge Co-Chief Investment Officer Brett Messing had capped investors in his previous fund, GPS Partners, after a significant decline in January 2008, but fewer than 20% of clients had requested withdrawals at the time.
*This is not investment advice.
