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This crypto hedge fund has grown its AUM by 400% over the past 4 months

This crypto hedge fund has grown its AUM by 400% over the past 4 months
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CryptoSlate obtained an update on Strix Leviathan, a Seattle-based crypto hedge fund, The team has been in business since 2018 and exclusively trades the crypto markets using proprietary trading tools and algorithms.

Strix Leviathanโ€™s Fund, which operates a systematic investment approach by taking long and short directional positions in the cryptocurrency markets.

The Fundโ€™s system includes a variety of risk-on/risk-off models including algorithmic momentum, trend-following, and pairs trading, with its primary objective of compounding investor capital over complete market cycles with superior risk-adjusted returns.

The latter (risk-adjusted returns) is used to measure an investmentโ€™s return by examining how much risk is taken in obtaining the return. This means not being a degen trader and putting oneโ€™s entire portfolio maxed out to 125x leverage on the line. Instead, such a strategy ensures the largest possible returns with strategically minimized risk (in terms of capital).

2020 fund performance

Risk-adjusted returns in 2020 were 124%, with the largest monthly mark in November 2020, with profits of 31%, while its worst in May, with losses of just under 11%. Bitcoin (and other cryptocurrencies) were especially volatile during these periods, which may have contributed to the sizable profits and losses.

The returns were a ten-fold increase compared to 2019, when the fund returned a relatively menial 10% to clients (but enough to make TradFi bros jealous.)

The Fund had superior performance compared to other funds like the Bitwise 10 Index (BITX) and Bloomberg Galaxy Crypto Index (BGCI) by delivering on the upside of the asset class but doing so with about half of the volatility of a buy-and-hold approach. ย 

The team has quadrupled their research and analyst team, has digitized their entire investor onboarding flow to simplify fund subscriptions and has updated their investor portal with reporting and attribution tracking in their quest to be the most transparent fund in the space.ย 

The drawdowns were significantly lesser as well. Nest Fund only saw a max drawdown of 24%, while BITX and BGCI saw 71.8% and 75.6% drawdowns respectively.

Strix Leviathan is domiciled in Delaware and the BVI, and has a minimum subscription of $50,000 with monthly and quarterly redemptions. Its fee structure is a 2% management fee on principal capital and a 20% performance fee on profits (the industry standard).ย 

All of Strix Levanthanโ€™s cryptocurrencies are held with either custodians Anchorage or Coinbase, and the firm banks with crypto-focused player Silvergate. The fund utilizes MG Stover as their Third Party Administrator and Aspect Advisors serve as their compliance consultants.

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