The fund manager Anthony Scaramucci agreed to sell a large stake in his SkyBridge Capital business to the cryptocurrency billionaire Sam Bankman-Fried to prove it had a long-term future, he said, after investment losses linked to the plunging price of digital assets.
SkyBridge announced on Friday that Bankman-Fried’s FTX Ventures will acquire a 30 per cent stake in the group. As part of the agreement, SkyBridge will spend $40mn to buy cryptocurrencies.
The investment ties two high-profile figures in markets together. Scaramucci briefly served as a White House communications director under former president Donald Trump and hosts the Salt financial conference, which gathered this week in New York.
Bankman-Fried runs FTX, one of the world’s largest crypto exchanges, and has recently deployed his fortune as a saviour of struggling businesses in the crypto sector.
Scaramucci did not disclose the dollar value of FTX Ventures’ deal with SkyBridge, but he said the deal also provides a three-year option to acquire 85 per cent of his fund group.
“If you have $50mn in liquid assets on your balance sheet, people don’t think you’re going out of business,” Scaramucci told reporters at his conference on Monday. “It was very important to me to say that SkyBridge is set up for the next 20 or 30 years.”
Scaramucci said that the FTX deal was a product of poor performance in a poor market. SkyBridge, which has $2.8bn in assets under management, is down 25 per cent this year, he said.
“Bear markets suck,” he added. “If I was doing super-well right now — our performance is mediocre, lacklustre — who knows if we would be doing the transaction.”
Scaramucci said the transaction was decided over a two-hour lunch at a hotel in the Bahamas, where Bankman-Fried is based. Scaramucci was with his family on a Disney cruise that had docked in the islands.
He said he proposed lunch both to discuss the possibility of a partnership, as well as to avoid going to a water park with his children. He was initially looking to sell just 15 per cent of his fund group.
SkyBridge has historically invested in hedge funds, but Scaramucci pivoted to cryptocurrencies as he became a public proponent of digital assets. Sixteen per cent of the fund was in crypto before the 2022 sell-off, he said, a figure that has dropped to 8 per cent as the value of digital tokens has fallen.
Scaramucci said the $40mn in crypto purchased with the FTX investment was now worth about $50mn, and believed SkyBridge bought at close to the bottom of the market.
“We didn’t need Sam’s money . . . to run the business,” he said. “We aren’t using the proceeds for anything other than balance sheet commitment.”
He said the deal with the crypto entrepreneur has a three- to five-year horizon, and if Bankman-Fried exercised the full SkyBridge stake, Scaramucci would hold the remaining 15 per cent.
Holding up a newspaper illustration of him on a sinking ship laden with cryptocurrencies, Scaramucci said he wasn’t concerned about those who doubted the future of his firm. “I don’t care . . . I framed it and put it in my office.”