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Hedge Fund Nickel Digital’s Diversified Alpha Fund Beats Global Hedge Fund Indices
London-based Nickel Digital Asset Management (Nickel), Europe’s leading regulated and award-winning digital assets hedge fund manager, has delivered a strong performance in its multimanager Diversified Alpha Fund. The firm was founded over four years ago by alumni of Bankers Trust, Goldman Sachs and JPMorgan to provide institutional-grade access to the digital assets market.
The success of the fund, which has beaten returns from comparable hedge fund indices this year highlights the growing importance of digital asset funds as part of institutional investment strategies given their ability to deliver non-correlated returns.
Digital assets have delivered exceptional growth in 1Q2023 partly down to recovering from previous lows but also due to worries over banking failures highlighting blockchain’s unique strengths, free from inherent issues of the fractional reserve model of traditional banks.
Nickel’s data shows its Diversified Alpha Fund has delivered an estimated +7.5% return YTD to 30 April 2023, strongly outperforming major indices in its sector including the HFRX Absolute Return Index (0.0% YTD); the HFRX Global Hedge Fund Index (+0.3% YTD) and the HFRX Equity Market Neutral Index (-0.4% YTD).
Diversified Alpha Fund is a non-directional multi-strategy digital asset fund which wraps a portfolio of attractive but hard-to-access and capacity-constrained strategies into a single, investible fund with target volatility of below 10%. It is designed to generate non-correlated returns in all market environments relying on a range of market signals and factors.
Underlying strategies include momentum and mean reversion trades, relative value, statistical arbitrage and systematic trading. It is underpinned by robust risk management allowing for 24/7 real time risk control.
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, said: “Diversified Alpha fund has benefited from dynamic capital allocation across a vast range of crypto arbitrage strategies run by ever expanding number of top performing managers. The persisting inefficiencies of the crypto market and growing trading volumes fuelled consistently strong, high risk-adjusted performance.”
“This is made all the more impressive when considering the ongoing banking crisis which has affected the returns of traditional hedge funds and highlighted that non-directional crypto strategies provide useful diversification benefits to institutional portfolios”
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