After Bitcoin propelled it to a double-digit gain in 2021, Anthony Scaramucci’s SkyBridge fund of funds fell 8.3 percent during January’s market turmoil and crypto pullback, according to letters sent to investors.
“We believe investors should approach 2022 with humility,” SkyBridge executives Scaramucci, Brett Messing, and Ray Nolte wrote in the firm’s year-end letter.
Even though investments in Bitcoin and Ethereum led a monthly decline of 6.39 percent in December, cryptocurrencies were still the biggest contributor to SkyBridge’s performance last year. They also made up 16.32 percent of the $2.37 billion portfolio at year end.
SkyBridge’s multi-adviser hedge fund portfolios, called Series G, ended the year up 11.23 percent.
So far this year, however, crypto has been one of the firm’s losers. Bitcoin fell 16 percent during January and was off more than 40 percent from its November highs.
Still, SkyBridge execs said they believed that “the cryptocurrency market, particularly Bitcoin, has been substantially de-risked over the last year,” adding that the “naysayers” are “remarkably unpersuasive.”
After January’s downturn, Bitcoin has begun to bounce back, but it has not entirely recovered. At $44,000 per bitcoin, it is still trading slightly below where it was a year ago.
Another big winner in 2021 was Dan Loeb’s Third Point — SkyBridge’s second-biggest allocation, at 11.72 percent of the portfolio. Third Point gained 23.9 percent last year, but it too had a bad January. The fund fell 8.7 percent.
Steve Cohen’s Point72 Asset Management, SkyBridge’s third-biggest position at 11.69 percent, reportedly gained about 9 percent in 2021. Point72’s gains were tempered by shorts in GameStop and other meme stocks.
Point72 is also an investor in Gabe Plotkin’s Melvin Capital, as is SkyBridge. Melvin did not recover from its 50 percent drawdown in January following the GameStop drama, which pummeled the hedge fund, whose shorts made it a target of meme stock investors. Melvin ended the year down 39 percent.
At year end, 3.6 percent of SkyBridge’s portfolio was still invested in Melvin.
SkyBridge said its long/short equity managers finished down over 20 percent, though it said it was staying the course with these hedge fund managers. In addition to Melvin, SkyBridge also had a commitment to Philippe Laffont’s Coatue Management, which comprised 3.19 percent of the portfolio.
Like others in the Tiger family, Coatue has suffered from the downturn in tech and Chinese stocks. According to the Wall Street Journal, it fell 4.2 percent in January after eking out a gain of 5.8 percent in 2021.
This year, SkyBridge said it plans to maintain substantial commitments to Third Point and Point72 Asset Management, while also adding capital to Millennium Management.
“These managers have demonstrated an ability to generate returns while also protecting capital during difficult markets,” the team wrote.
SkyBridge’s other top holdings at year end included Linden, Axonic Credit Opportunities, Hildene Opportunities II, Armistice, and Seer Capital Partners.