Crypto hedge fund Argentium unveils systematic multi-strategy arbitrage fund

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Argentium Digital Asset Management, a London-based cryptocurrency hedge fund founded by ex-JP Morgan and Credit Suisse manager Paul Frost-Smith, has unveiled a new Cayman-based fund which will formally launch next month.

The Argentium Chimera Fund is systematic multi-strategy arbitrage fund which combines three investment strategies borrowed from foreign exchange investing and adapted to tackle cryptocurrencies’ higher volatility and lower liquidity.

Fusing market neutral arbitrage with long/short and market-making approaches, the fund will target the top 30 cryptocurrencies by market value traded across the top 10 global exchanges by volume, and aims to generate consistent returns regardless of market direction.

AK Jensen, an FCA-regulated platform, will provide infrastructure for the fund, which begins trading with around USD20 million in external capital on 1st July. The fund has raised capital from a mix of family offices, ultra-high-net-worth individuals and institutional investors.  

Commenting on the launch, founder and CEO Paul Frost-Smith described cryptocurrencies’ current momentum as a “once in a generation opportunity.”

“The decentralised nature of digital assets and cryptocurrencies, and the differences in infrastructure and liquidity between exchanges, presents a unique opportunity for arbitrage and liquidity provision,” Frost-Smith said. “Transforming established FX strategies into the higher vol crypto environment is where we excel.”                                

Before launching Argentium alongside co-founders Larry Grant, COO, and Marc Deveaux, CTO, Frost-Smith had been CEO and head of markets at Haitong Securities. Before that, he was global head of longevity markets at Credit Suisse and was previously global head of asset management strategy at Swiss Re, having founded multi-strategy hedge fund Castlegrove Capital Management in 2004. Earlier, he had been a founding member of fund-of-funds KGR Capital, having spent seven years at JP Morgan in Tokyo and Hong Kong, latterly as head of equity derivatives for Asia-Pacific.

US-based CTO Deveaux, who had software-focused stints at TradingScreen, Morgan Stanley and the Toronto Stock Exchange, is joined by head of portfolio risk Sean Wang, a former executive director at Morgan Stanley.

Frost-Smith added: “I believe we are at an inflection point in the adoption of crypto assets, and that they will become increasingly important to diversification of investor portfolios and to the way in which value is perceived and stored.”                                  

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