Stockholm (HedgeNordic) – Swedish digital assets-focused investment firm Hilbert launched its Hilbert V1 Fund in mid-August with SEK 50 million of internal capital. The lower-risk crypto-focused fund will soon be open to external investors after Hilbert’s asset management arm, Hilbert Capital, secured approval from the Cayman Islands Monetary Authority (CIMA).
The recently-launched Hilbert V1 Fund seeks to exhibit limited directional exposure to cryptocurrencies, with the bulk of its returns stemming from Hilbert’s long-running Caerus volatility harvesting strategy. This rules-based strategy is based on a continuous rebalancing process of “buying low and selling high” to keep a basket of about 50 cryptocurrencies at pre-determined weights. “The underlying core algorithm has been operating 24/7/365 for over 5 years,” says Richard Murray (pictured), the CEO of Hilbert Group’s asset management arm. “The strategy likes noise and volatility in the market as this provides profitable trading conditions.”
“Hilbert V1 Fund offers a market-neutral return profile – for us, that means consistent trading alpha and not losing money when crypto tanks.”
“Hilbert V1 Fund offers a market-neutral return profile – for us, that means consistent trading alpha and not losing money when crypto tanks,” emphasizes Murray, a former Cevian Capital senior executive who was appointed as the CEO of Hilbert Capital this summer. The underlying strategy behind Hilbert V1 Fund, run with proprietary capital since May 1, underwent a stress test as cryptocurrency markets went into a full meltdown starting early May. “The crypto market has fallen about 50% since May 1, whereas Hilbert V1 is down only 4% net,” says Murray. “Trades are sized according to our strict drawdown objective and the fund targets returns higher than 15% net annualised.”
“Hilbert’s mission is enabling institutional investor access to the asset class in a way which fits good investment and risk management principles,” comments Niclas Sandstrom, Hilbert Group’s CEO and co-founder. “Over the last 5 years, we have distilled a lot of real-world and theoretical complexity behind the scenes to enable simple, coherent trading strategies,” he continues. “Our strategies offer a range of drawdown/return profiles, but each is based on the same in-house rules: no leverage, high diversification, and avoidance of risk exposures we cannot quantify.”