Key Takeaways
- • Nickel Digital Asset Management's multimanager Diversified Alpha Fund posted an estimated +7.5% return year-to-date through 30 April 2023, according to Nickel's own data.
- • The fund outperformed the HFRX Global Hedge Fund Index (+0.3% YTD), the HFRX Absolute Return Index (0.0% YTD) and the HFRX Equity Market Neutral Index (-0.4% YTD) over the same period.
- • The fund is a non-directional multi-strategy digital asset vehicle with a target volatility below 10%, drawing on momentum, mean reversion, relative value, statistical arbitrage and systematic strategies.
- • CEO and Founding Partner Anatoly Crachilov attributed performance to dynamic capital allocation across crypto arbitrage strategies and persistent market inefficiencies.
- • Nickel positions the fund's non-correlated returns as a diversification benefit for institutional portfolios amid the 2023 banking crisis.
Summary
London-based Nickel Digital Asset Management (Nickel), which describes itself as Europe's leading regulated and award-winning digital assets hedge fund manager, reported a strong year-to-date performance in its multimanager Diversified Alpha Fund, according to an article by Anton Grant published by FF News on 4 May 2023. The firm was founded more than four years earlier by alumni of Bankers Trust, Goldman Sachs and JPMorgan to provide institutional-grade access to the digital assets market.
Nickel's data shows the fund delivered an estimated +7.5% return year-to-date to 30 April 2023. This compares with the HFRX Absolute Return Index at 0.0%, the HFRX Global Hedge Fund Index at +0.3%, and the HFRX Equity Market Neutral Index at -0.4% over the same period. These figures are the firm's own estimates and have not been independently verified in the source material.
The Diversified Alpha Fund is described as a non-directional multi-strategy digital asset fund that packages hard-to-access, capacity-constrained strategies into a single investible vehicle. It targets volatility below 10% and seeks non-correlated returns across market environments. Underlying approaches include momentum and mean reversion trading, relative value, statistical arbitrage and systematic trading, supported by risk management that provides 24/7 real-time risk control.
Crachilov attributed the results to dynamic capital allocation across a broad range of crypto arbitrage strategies run by a growing number of managers, together with persistent inefficiencies in the crypto market and rising trading volumes. He added that the performance was more notable given the banking crisis, which he said had hurt traditional hedge fund returns and shown that non-directional crypto strategies offer diversification benefits to institutional portfolios.
The article also notes that digital assets rallied in the first quarter of 2023, partly recovering from earlier lows and partly on concerns over banking failures, which the firm argues highlight blockchain's strengths relative to the fractional reserve model of traditional banks.
Nickel's data shows the fund delivered an estimated +7.5% return year-to-date to 30 April 2023. This compares with the HFRX Absolute Return Index at 0.0%, the HFRX Global Hedge Fund Index at +0.3%, and the HFRX Equity Market Neutral Index at -0.4% over the same period. These figures are the firm's own estimates and have not been independently verified in the source material.
The Diversified Alpha Fund is described as a non-directional multi-strategy digital asset fund that packages hard-to-access, capacity-constrained strategies into a single investible vehicle. It targets volatility below 10% and seeks non-correlated returns across market environments. Underlying approaches include momentum and mean reversion trading, relative value, statistical arbitrage and systematic trading, supported by risk management that provides 24/7 real-time risk control.
Crachilov attributed the results to dynamic capital allocation across a broad range of crypto arbitrage strategies run by a growing number of managers, together with persistent inefficiencies in the crypto market and rising trading volumes. He added that the performance was more notable given the banking crisis, which he said had hurt traditional hedge fund returns and shown that non-directional crypto strategies offer diversification benefits to institutional portfolios.
The article also notes that digital assets rallied in the first quarter of 2023, partly recovering from earlier lows and partly on concerns over banking failures, which the firm argues highlight blockchain's strengths relative to the fractional reserve model of traditional banks.
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