What is a Quantitative Market Neutral Crypto Hedge Fund Of Funds?

James Hodges is a general partner and co-founder of Amphibian Capital. He is a serial entrepreneur and crypto influencer. He helped scale fintech startup MX.com from two to 28 million users.

Russ Alan Prince: What is Amphibious Capital?

James Hodges: Amphibian Capital is a market neutral financial vehicle built to thrive in uncertain times. It is designed only for investors who want exposure to cryptocurrency as an asset class, with strong diversification and much lower volatility. At the same time, the fund is liquid with low withdrawals and low correlation to shares, bonds, property etc. This is very important for investors who are looking for an attractive risk-adjusted return. To date, the portfolio strategy has averaged 30%+ net annually and zero down in quarters over 5 years.

The team running Amphibian Capital is composed of 15 individuals, with experience managing $6 billion in assets As Amphibian Capital scales, a higher percentage of general partner profits are allocated to impact projects.

prince: What is a quantitative, market neutral crypto hedge fund of funds?

Hodges: When hedge funds became mainstream in the early 1990s, dozens of billionaires were created as the strategies moved away from human emotion to intelligent, systematic trading.

Quantitative, market-neutral crypto hedge funds are designed to capitalize on volatility, market inefficiencies and infrastructure investment. While investing in cryptocurrency can be extremely up and down, there is much more consistency and lower withdrawal/risk through a vehicle like this because of the diversification across funds, but also because it doesn’t necessarily trade in the direction of price.

Amphibian Capital is a fund of funds. This means that instead of being exposed to one fund, it invests across thirteen or more funds. We have researched more than 250 crypto hedge funds, thoroughly reviewed 50 and put the best 13 in one portfolio> we expect to put the best 20 in one portfolio soon. We created Amphibian Capital with an onshore feeder in Delaware, with an offshore master in the British Virgin Islands.

Many of the crypto investment strategies provide short-term capital gains. That’s why we implement strategies through vehicles that maximize tax efficiency and lower our clients’ annual taxes.

prince: What is the future of this type of investment approach?

Hodges: In traditional stock markets, new quantitative strategies are usually developed by firms once or twice a year. In this market it’s more like once a month. For example, in 2020 DeFi – decentralized finance – emerged opening up a plethora of possibilities. There is so much innovation happening in the space that as the market grows more strategies will become available.

While new players will continue to enter the field, we expect incredible opportunities to remain available for the next five to ten years until higher saturation occurs. Due to the growth in opportunities, a fund of funds makes sense as Amphibian Capital continues to stay on top of the market as it evolves and adapts the portfolio as new strategies become available. It’s a matter of taking the best crypto investment strategies and putting them together.

RUSSIAN ALAN PRINCE is CEO of Private Wealth magazine (pw-mag.com) and Chief Content Officer of High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy entrepreneurs on fast track and select professionals.