Goldman, Coinbase Back Crypto Fund Manager One River Digital

(Bloomberg) —

One River Digital Asset Management, a startup cryptocurrency-fund manager backed by Alan Howard, raised $41 million from new investors including Goldman Sachs Group Inc. and Coinbase Global Inc.

The two companies acquired minority stakes as part of a Series A funding round that values One River Digital at $186 million. Liberty Mutual Group Inc., the insurer, and Infinity Investment Partners, a European family office, also participated. Howard, the co-founder of Breven Howard Asset Management, provided seed funding for One River Digital last year.

“What’s clear is that asset management is going to make the transition to the tokenized world,” Eric Peters, One River Digital’s founder and chief executive officer, said in an interview. “And in that world, the opportunity is so much bigger. The question was: How do we capitalize on that?”

Today, One River Digital manages two main funds, one that holds Bitcoin and another that holds Ethereum. Peters recently opened a third fund with a wider mandate and used it to invest in Solana, a decentralized computing platform with its own token. He’s planing at least two more products: An Ethereum-staking fund and a crypto-lending vehicle that’ll generate income in dollars.

Greenwich, Connecticut-based One River Digital also is developing an index that’ll include only the digital assets that meet institutional standards for liquidity, security and decentralized ownership and function.

The funding round was a rare opportunity in crypto. Most startups in the industry focus on solving technical problems or are involved in token creation or trading. One River Digital is concerned only with managing assets for institutional investors such as pensions, endowments and sovereign-wealth funds.

“The potential for rapid digitization of global finance presents both challenges and opportunities for investment organizations,” Liberty Mutual Chief Investment Officer Vlad Barbalat said in a statement. “We are excited to partner with the One River team, which brings deep institutional expertise.”

Goldman and Coinbase declined to comment. An email to Infinity wasn’t answered.

Peters founded One River Digital in 2020 as a subsidiary of One River Asset Management, which bets on market volatility. It quickly became one of the largest investors in Bitcoin and Ethereum, and the value of its assets surged as both tokens rose to records. 

One River Digital has since cashed in $1.25 billion and returned the money to investors. Its three cryptocurrency funds currently hold about $500 million.

Earlier this year, Peters brought on Jay Clayton, the former chairman of the U.S. Securities and Exchange Commission, as a member of One River Digital’s advisory board.

Investing in One River Digital positions Goldman, Coinbase and Liberty Mutual as potential distributors or joint developers of its crypto products. Peters said his chief concern in the funding round was recruiting the right partners.

“All I care about is winning and doing it the right way, not raising the most money possible,” he said.

©2021 Bloomberg L.P.

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