Less than a year ago, billionaire hedge fund manager Paul Tudor Jones confirmed that he had invested 1% to 2% of his assets in bitcoin without revealing how or where he had bought the crypto. New filings with the U.S. Securities and Exchange Commission show that Jones’ firm, the $44.5 billion Tudor Investment Corporation, has secured custodial ties with Bakkt and Coinbase in the year since.
The documents reveal that the billionaire’s family-only hedge fund benefits from custodial services provided by Bakkt Trust Company, Coinbase Custody Trust Company, and Tagomi Trading LLC (which was acquired by Coinbase last year).
Such filings unfold new aspects of the institutional crypto dealmaking, with important clients piling into the pioneering asset class that many, including bankers, regarded as being absurd.
Tudor Jones is among the many big names that regard Bitcoin as a hedge against inflation, and the ranks of many such names have witnessed growth in the pandemic economy.
What’s more, given the 2020-2021 bull market, the importance of such moves only increases. According to Chainalysis, $20 million+ whales purchased over 500,000 bitcoins in the last part of the previous year.
However, there are no official statements from Tudor Jones, Coinbase, and Bakkt regarding the information included in the SEC filings.
For the time being, it seems that Tudor Jones is restricting direct crypto exposure to only a few clients. Out of the billionaire’s firm’s eight hedge funds, “Tudor Family Fund II” is the only one that disclosed crypto custodians on the company’s annual Form ADV, which was filed on March 31st. This fund is open to relatives and close associates.
While the worth of the Tudor Jones family fund was at the $1 billion level at the last check, it is unlikely for all that to be bitcoin. The fund’s partners in the custodian and prime brokerage space include names such as Citigroup, Deutsche Bank, and Credit Suisse, which may be a sign of broad exposure to the global markets.
What’s worth noting is that the asset manager’s latest regulatory risk brochure features a section dedicated entirely to the risks of investing in crypto.
The document says that “Certain Clients are permitted to enter into cryptocurrency transactions as described in the relevant Offering Materials” and can do so through “direct investment on a spot basis or indirect investment” in crypto derivatives.
There are no details regarding the so-called “certain clients” and what the document means by it. Plus, cryptocurrency transactions are not listed in the section dedicated to the investment strategies that are only available to “proprietary accounts,” such as the family fund.
Tudor Investment Corp. is not the first big firm to announce crypto purchases without revealing its custody links. Britain’s Ruffer Investment did something similar when it acquired $745 million in bitcoin last November. At the time of the announcement, no information regarding who owned the coins was revealed. It was only later that details regarding the custodian came to light, pointing to Coinbase.