Last Friday, FTX Ventures acquired a 30% stake in SkyBridge Capital, Anthony Scaramucci’s $2.5 billion alternative asset manager. The partnership was announced on the eve of SALT New York, a leading finance, technology, and macro forums for the alternative investment world. Monday’s programming set the stage for SkyBridge’s vision for the future of a crypto-driven financial world. Touching upon everything from the relevance of the FTX investment, the need for regularity clarity, and each camp’s strengths, the show reaffirmed the idea that TradFi and DeFi players will need one another in order for digital assets (crypto) to thrive.
SkyBridge Capital and SALT
Launching his finance career at Goldman Sachs and Lehman Brothers, Scaramucci founded Oscar Capital Partners in 1996. After selling the firm to Neuberger Berman in 2001, he launched SkyBridge Capital in January 2005. Like most funds, SkyBridge did not escape the ravages of the Global Financial Crisis, posting what would be it’s worst year, falling 19 per cent in 2008. With the industry in turmoil, Scaramucci took a “go big or go home” contrarian approach and launched the first SALT conference in Las Vegas in March 2009. Framed as more of a public policy event, the show has featured heads of state, senior military leaders, renowned investors, athletes, actors, and entrepreneurs that shape business and finance around the world.
If years past are any indicator, day 1 at SALT pointed to a global financial system that will rely heavily on crypto and its underlying distributed ledger technology. While the world’s imagination was captured by the asset class’ meteoric rise, the 2022 crypto winter has given financial institutions the opportunity to further investigate the technology and their approaches to adapting it. Like any new technology and asset class, however, there are challenges. The lack of institutional operating knowledge and the constraints of legacy technology platforms are just the tip of the iceberg. While financial technologists are creating solutions that alleviate these concerns, regulatory challenges complicate acceptance as institutions wrestle with issues not encountered with traditional financial assets and systems. Lastly, the cultural differences between financiers and “degens,” creates a less quantifiable layer of friction that has slowed the adoption of digital assets by enterprise users.
The FTX Investment
Sam Bankman-Fried (SBF) has been heralded as, perhaps, the most influential person in the crypto and Web3 world. His platform, FTX, has led the crypto dialogue worldwide and pushed for common sense regulatory reform that would provide clarity for crypto investors and firms. In addition to lobbying, the firm has aggressively invested in crypto
companies, even moreso in the midst of the crypto winter. Simultaneously heralded and reviled for offering bailouts to crypto lenders like Voyager Digital and BlockFi, Bankman-Fried has acknowledged that the investments could be highly risky, but has stated that being a, ”good, constructive actor in this space” justifies “incinerating a small amount of money.”
The SkyBridge-SBF connection was made when Scaramucci reached out to Bankman-Fried while the former was on a Disney family cruise in the Bahamas. The pair struck an unlikely alliance over lunch that subsequently led to the inaugural Crypto Bahamas conference in April 2022, inside of seven months of FTX’ move to the Caribbean island nation from Hong Kong.
FTX Ventures took a 30% stake in SkyBridge Capital with a right to buy up to 85% of the firm. The financing package included $40 million for investment in a basket of various cryptocurrencies, which was deployed immediately. For FTX, the partnership opens a network of global finance relationships at a time when TradFi institutions are planning their digital asset strategies. For SkyBridge, the relationship translates into an elevated look at the rapidly developing crypto ecosystem in which FTX plays a leading role.
While Scaramucci has been characterized in many ways, this latest move can be seen as nothing but pragmatic. SkyBridge has weathered its share of market turmoil and has grown at each turn. It’s important to recall that less than a year after that inaugural SALT conference, SkyBridge purchased Citigroup’s