Macro Genius Invests Across the Crypto Arena

British Hedge Fund Virtuoso Alan Howard Invests Across the Crypto Landscape Were you forwarded this email? [Sign-up to Rude Awakening here.]( [Unsubscribe]( [The Rude Awakening] Macro Genius Invests Across the Crypto Arena - Alan Howard made his name as a global macro hedge fund manager. - After the rough decade hedge funds suffered, he’s turned to the crypto ecosystem. - BH Digital is Howard’s vehicle to venture deep down the crypto rabbit hole. Recommended Link [Trump’s Secret Legacy]( [Click here for more...]( In July 2020, the Trump administration oversaw a RADICAL change to the tech world… one that could unleash a huge wave of disruption… prosperity… and wealth creation in the near future. Chances are, you haven’t heard about it until today. But according to one of America’s most respected tech forecasters, it’s set to create small fortunes right here in this country. He recently went on camera to explain why... [Click Here To Watch]( Sean Ring Editor, Rude Awakening It’s Thursday… nearly there! My good friend, business partner, and Rude reader Andy arrived last night in Asti. We immediately proceeded to the pub - of course! - and downed some lovely pints in - of course! - the only Irish bar in town. That the pub stays open until 1 am only helped us relax more, catching up and mapping out plans for the next three weeks he’s here. But it also means that I woke up late this morning, scrambling to figure out what to write. I fumbled with my iPhone to check my messages. Luckily, last week Crypto Eamonn invited me into his all-things-crypto WhatsApp group. This morning, one of his fellow crypto enthusiasts posted an article that intrigued the ex-bankers and traders in the group. [The piece by Ryan Weeks over at Block.io]( is titled, “Hedge fund manager Alan Howard explains why he’s investing across the entire crypto ecosystem.” Let me spend some time telling you why this surprised me so. London, 1999 When I arrived in London in October 1999, I started in Credit Suisse’s trader operations team. Those are the people who “capture the trades.” That is, when a trader executes a trade with a counterparty, they need to fill out a ticket and give it to the trader operations team. From there, the trader operations team enters the trade into the trade capture system so the bank’s various other units, like risk management, documentation, and settlement, can do their jobs. It was braindead work for me, but it’s a critical component of banking. If the trade capture team fails, then no one else knows what the trader has done. Then securities, cash, trade confirmations, and trade settlement all fail. This banal part of banking is not what they write books about. But operations and back office staff account for most of a major investment bank’s headcount. Of course, most operations staff dream about being a trader - and making a good trader’s bonus! And the best trader at Credit Suisse in the late 90s and early 00s was Alan Howard. Analysts Think. Traders Think and Do. I was scared to death of Alan and his team. Intimidated, really. They were Credit Suisse’s proprietary trading team, and Alan was the “Head of Prop.” Proprietary trading is when a bank’s CEO gives a pile of cash to his best internal traders to make a bigger pile of cash. This practice was rampant before the 2008 financial crisis. But a funny thing happened. These traders realized they didn’t need to work for a bank to make all this money. There was plenty of investor capital out there for them to trade and earn fat fees from. And when you have a well-deserved reputation like Alan Howard, you take your chances when they come. That chance happened when John Mack, widely known as a former Morgan Stanley CEO, became Credit Suisse’s CEO for a three-year stint in the early 2000s. It’s alleged - and I honestly can’t remember - every year, Credit Suisse’s former CEO Allan Wheat used to pay Howard $30 million in cash for his services as a bonus. When Mack came in, he told Howard he wanted to compensate him with Credit Suisse stock. Howard told Mack he wanted to leave the firm. But there was a way for both to profit from this situation. Howard would take his proprietary trading team and start his own hedge fund. Mack would seed the new Brevan Howard fund with what I believe was a $300 million investment. The “Brevan” in Brevan Howard is the first initial of the other traders who went with Howard. Why would Mack do this? Because Howard was - and is - a trader who has outstanding macroeconomic knowledge, trades on it, and manages his risk. Recommended Link ["The Situation Is Getting Worse By The Day”]( That’s what the President of the US Chamber of Commerce just said about the supply chain. If you thought the supply chain issues were over, think again… Things are about to get much, much worse. And everything from your local grocery store to your gas station could be impacted. That’s why I’m urging everyone I can to prepare now… See the #1 move to make before this problem gets any worse... [Click Here Now]( Brevan Howard and Crypto And that’s why seeing Howard move assets into crypto is so interesting. Alan Howard is a global macro hedge fund manager. That’s his forte. Macro traders identify opportunities in the global markets, wherever they occur, and trade them using stocks, bonds, futures, options, swaps… any financial instrument. When I moved from operations to the futures desk, I remember my good friend and Rude reader Norfolk Freddie executing (yield) curve trades for Brevan using futures. Now this titan of the macro world has suddenly gone nouveau crypto? Most of the WhatsApp group members who commented agree that Howard has always been ahead of the curve. And this move demonstrates that while crypto is taking its lumps lately, it’s still the place for forward-looking investors. But something another good friend and Rude reader, Best Man Guy - he really was my Best Man! - said was buzzing in my ear. Best Man Guy worked in the alternative investment space for years. Alternative investments are where hedge funds sit in the financial ecosystem, along with commodities, infrastructure, private equity, and real estate. Guy once slurred over a pint or ten in The Penny Black in Singapore, “Seanie, you gotta watch out for style drift. That’s the first sign of trouble in a hedge fund.” Style drift happens when a fund manager with a stated investment style begins to transform the fund under management into a completely different style. Of course, the investment outcome remains to be seen. But that Alan Howard is taking this path is certainly worthy of note. Wrap Up Alan Howard has leaped into the crypto world with relish. In [Weeks’s piece]( he’s quoted as saying: BH Digital reflects my belief in the importance of investing across the entire ecosystem, regardless of instrument (i.e., token, equity, NFT, etc.), in a diversified and well risk-managed way. This ensures that your return stream is never dependent on just one strategy, one theme, or one risk-taker. Though one can call this move “style drift,” Howard’s diversification strategy sounds like vintage Howard: spotting opportunities, taking the risk, and managing that risk well. Howard mentioned, “being in the arena” as well. That’s from Theodore Roosevelt. Here’s the full quote: It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows, in the end, the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. Here’s to striving for victory in the arena. Until tomorrow. All the best, Sean Ring Editor, Rude Awakening [Whitelist Us]( | [Archive]( | [Privacy Policy]( | [Unsubscribe]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. 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