Fund manager Anthony Scaramucci has agreed to sell a large chunk of his SkyBridge Capital business to cryptocurrency billionaire Sam Bankman-Fried to prove he has a long-term future, he says, after suffered investment losses related to the fall in the price of digital assets.
SkyBridge announced Friday that Bankman-Fried’s FTX Ventures will acquire a 30% stake in the group. As part of the deal, SkyBridge will spend $40 million to purchase cryptocurrencies.
The investment brings together two leading figures in the markets. Scaramucci briefly served as White House communications director under former President Donald Trump and hosts the Salt Financial Conference, which met this week in New York.
Bankman-Fried runs FTX, one of the largest crypto exchanges in the world, and has recently rolled out his fortune as a savior to struggling businesses in the crypto industry.
Scaramucci did not disclose the dollar value of FTX Ventures’ deal with SkyBridge, but he said he was offering a three-year option to acquire 85% of his fund group.
“If you have $50 million of liquid assets on your balance sheet, people don’t think you’re going to go bankrupt,” Scaramucci told reporters during his conference Monday. “It was very important for me to say that SkyBridge is set up for the next 20 or 30 years.”
Scaramucci said the FTX deal was the product of poor performance in a poor market. SkyBridge, which has $2.8 billion in assets under management, is down 25% this year, he said.
“Bear markets suck,” he added. “If I was doing great right now – our performance is poor, lackluster – who knows if we’d make the trade.”
Scaramucci said the deal 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 offered a lunch 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% of his group of funds.
SkyBridge has always invested in hedge funds, but Scaramucci turned to cryptocurrencies by becoming a public supporter of digital assets. Sixteen percent of the fund was in crypto ahead of the 2022 selloff, he said, a figure that fell to 8 percent as the value of digital tokens fell.
Scaramucci said the $40 million worth of crypto bought with the FTX investment is now worth around $50 million and believes SkyBridge bought near the bottom of the market.
“We didn’t need Sam’s money. . to run the business,” he said. “We don’t use the proceeds for anything other than balance sheet commitment.”
He said the deal with the crypto entrepreneur has a horizon of three to five years and if Bankman-Fried exercised SkyBridge’s entire stake, Scaramucci would own the remaining 15%.
Maintain a newspaper illustration of him on a sinking ship laden with cryptocurrencies, Scaramucci said he doesn’t care about those who doubt his company’s future. “I don’t care . . . I framed it and put it in my office.