- SkyBridge Capital has halted withdrawals from one of its funds, according to Bloomberg.
- The company said the fund held 20% of its assets in private companies, which are hard to sell.
- The Legion Strategy fund also holds 10% in crypto, which has gravely suffered recently.
Anthony Scaramucci's SkyBridge Capital has suspended client withdrawals from one of its funds against a backdrop of a depreciating stock market, according to Bloomberg.
The Legion Strategies fund stopped client redemptions on the grounds that 20% of its holdings are in privately held companies, which are harder to sell, Bloomberg cited people familiar with the matter as saying. They added that the fund's holdings included crypto exchange FTX, and now holds just 10% of its assets in cryptocurrencies, the news agency said.
The wider stock and cryptocurrency markets have crumbled as the Federal Reserve tries to fight soaring inflation with higher interest rates. The central bank's aggressive monetary policy stance has dampened investor sentiment as they fret over the threat of a recession hitting the US economy.
Earlier in June, the S&P 500 slipped into bear market territory highlighting a weakening stock market, while in the crypto industry, there has been two market meltdowns and a wave of company bankruptcies among some of the industry's largest firms including lender Celsius Network and crypto hedge fund Three Arrows.
After peaking last fall, crypto's total market value has dropped more than 66%, with the world's largest token, bitcoin, losing 50% in the same time period.
Publicly traded crypto companies on the stock market are also feeling the sting of inflationary pressures, with major exchange Coinbase losing some 77% in value so far this year. Its shares have lost 90% since listing on the stock market in April last year.
According to Bloomberg, the Legion Strategies fund gained exposure into the digital asset world through other funds managed by SkyBridge Capital, including vehicles focused on bitcoin, ethereum and algorand. By February 28, nearly a quarter of the fund's assets were invested those crypto exposed funds, the report said.
Hedge fund manager Scaramucci, known in the media as "The Mooch", has been a big proponent of crypto. Back in May, he told Insider in an interview that roughly half of Skybridge's then-$3.5 billion in assets under management were tied to cryptocurrencies like bitcoin and ethereum, as well as crypto-related stocks. This time last year, he was predicting bitcoin would hit $100,000. It's currently worth around a fifth of that.
SkyBridge Capital did not immediately respond to Insider's out-of-hours request for comment.