Crypto hedge fund Argentium commits to carbon neutrality

Crypto ESG

Argentium Digital Asset Management, a London-based cryptocurrency hedge fund founded by ex-JP Morgan and Credit Suisse manager Paul Frost-Smith, has committed to a carbon-neutral investment approach.  

The fund’s blockchain activity will be independently assessed annually for carbon impact, with Argentium pledging to purchase carbon credits or offsets to neutralise that impact. In addition, Argentium will purchase credits or offsets to cover its own carbon footprint. 

As part of this initiative, Argentium – which recently unveiled its systematic multi-strategy arbitrage fund Chimera – is working with Brazilian environmental platform MOSS, which creates carbon offset programmes through its MCO2 token, the world’s first tokenised carbon credit. 

“We will purchase and ‘burn’ the required number of MCO2 tokens to ensure both the fund and Argentium operate on a carbon-neutral basis,” Argentium CEO Paul Frost-Smith said. 

As crypto assets’ energy consumption has come under closer scrutiny, the environmental impact and ESG credentials of digital currencies must also now be addressed, he observed. 

“Whilst Argentium believes that the share of market capitalisation represented by bitcoin and ‘proof of work’ will decline over time, as they have done in recent years, this will not remove the environmental impact altogether,” he said. “We also recognise that our trading activity necessitates the use of multiple blockchains and this has a carbon impact. 

“Each and every one of us has a responsibility towards the environment. I believe we are the first crypto fund in Europe to tackle these issues head-on.” 

He added: “We hope that others in the digital and cryptocurrency space will support this move with the adoption of similar strategies and that, as needs grow, this will include the investment banks, commercial and retail banks that have signaled their intention and commitment to the future of these markets.” 

The drive comes as the firm further strengthens its advisory board, business development and investor relations capability with a trio of new hires. 

Pierre Gourmet has been appointed as macro-focused advisory board member, focusing on how macroeconomic trends and themes will impact and shape crypto assets. A global derivatives structuring pioneer with more than 25 years’ experience in investment banking, Gourmet has held a number of senior global positions in large European investment banks including Société Générale, RBS and Nomura International. 

Paola Mantovani is named principal and head of investor relations, and also serves as business development head for the MENA region. She has more than 12 years of experience in global financial markets and investment banking, spending most of that time at Citigroup in London in corporate equity derivatives, focusing on originating, structuring, tailoring and executing strategic equity solutions for corporates, family offices, high net worth individuals and sovereign wealth funds and SWFs. 

The firm has also hired Simon Winston Smith as principal and head of business development for Australia and New Zealand. He has more than two decades’ experience in investment banking, most recently as a partner in an investment banking boutique operating in Asia Pacific. Before that, he was chief operating officer and head of capital markets at Greenway Capital and, earlier, managing director and co-head of japanese equities at JPMorgan Chase in Tokyo, where he had worked alongside Frost-Smith. He began his career at Goldman Sachs, where he launched and led its equities division in Australia.