Crypto funds poaching Wall Street talent amid digital currency boom

As major financial institutions shake up their employee base, more veterans are trickling out of Wall Street and into crypto funds.

Cryptocurrency and blockchain hedge fund Pantera Capital announced Tuesday the hiring of former Deutsche Bank Managing Director William Healy. Healy joins the fund’s west coast headquarters as president, effective March 1.

The Wall Street veteran co-founded Deutsche Bank’s Hedge Fund Priority Client group and was a key player in establishing the Dutch bank’s U.S. hedge fund strategy, according to Pantera’s investor letter published Tuesday.

“This is a transformative time,” Healy said in a statement. “The blockchain and digital currency environment today remind me of the inflection points in emerging markets and the alternative asset management industry to a more institutional management approach.”

Healy’s former employer Deutsche Bank will cut up at least 250 investment bank jobs, and could be as many as 500, Reuters reported Monday, citing a person close to the situation. Key traders meanwhile are leaving Goldman Sachs Group, Reuters also reported in January, as the firm looks to overhaul a struggling commodities unit.

Healy said the industry broadly is trending smaller.

“The underlying trends in the financial services industry is I think going in one direction,” Healy said, noting music sharing service Spotify’s decision not to follow the traditional IPO route. “I think five years from now they’ll be smaller than they are today.”

Pantera Capital CEO Dan Morehead said the firm got 95 new limited partners in February alone, while it took his firm 10 years to get the first 95 investors. The number of hedge funds focused on crypto is up to 226, and has more than doubled in the past four months, according to the latest estimates from research firm Autonomous NEXT.

Pantera, which has roughly $ 724 million assets under management, also announced the launch of its third blockchain-focused venture fund Tuesday. The new fund also will focus on peer-to-peer transactions, fintech, artificial intelligence and machine learning.

Pantera’s first fund launched in 2013, and was up 758.6 percent through the end of last year. That portfolio includes companies that help buy and store bitcoin including Ripple, Circle, Xapo and Bitstamp.

Pantera’s Healy is not the only new recruit in the crypto space announced Tuesday. Bitwise Asset Management, manager of the first cryptocurrency index fund, announced it would hire industry veteran Matt Hougan as vice president of research and development. Hougan was CEO of Inside ETFs and before that CEO of ETF.com.

Bitwise CEO Hunter Horsley said he’s seeing more of an appetite for folks like Hougan to jump into a new asset class.

“We’re seeing more top tier people come into the space,” he said. “Cryptocurrency’s bringing together software people, who tend to be those younger stereotypes, but also pulling in financial community who are really excited about the birth of a new asset class, or have been bored with low volatility or fee compression.”

Bitwise is still hiring, and Horsley said applicants are not the stereotypical Silicon Valley tech junkies. The company is getting applications from people on “both sides of the spectrum”, including Google and Blackrock.

“There are definitely industry veterans who are poking around,” Horsley said. “I don’t know how many will end up deciding to make the plunge but we definitely see a lot of senior people deciding to put out feelers.”

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