Novogratz’s Galaxy Reaches $1.2 Billion in Asset Management Unit

Billionaire investor Mike Novogratz’s Galaxy Digital Holdings Ltd. said its asset management unit has grown to about $1.2 billion after launching new products, including a Bitcoin mutual fund in partnership with Canada’s CI Financial Corp.

The company, based in New York but listed in Toronto, said in a statement Wednesday it expects to report income of $325 million for the fourth quarter after the value of Bitcoin and other holdings soared. Galaxy said it disclosed the preliminary results “given the material change in the operating environment of the cryptocurrency and digital sector” since it reported its third quarter.

Novogratz’s Galaxy Reaches $1.2 Billion in Asset Management Unit

Galaxy Digital is a financial firm that does asset management, trading, investment banking and other activities, with a focus on digital assets, cryptocurrencies and blockchain. Novogratz is trying to place it in the center of an explosion in investor interest in cryptocurrencies and retail funds that hold them.

Galaxy’s trading desk is one of several providing Bitcoins for the Purpose Bitcoin ETF, the first-ever approved in North America, which began trading on the Toronto Stock Exchange last week. Galaxy Digital will also act as a sub-adviser on a new Bitcoin ETF that CI Financial has also filed to launch.

“Even as late as June and July of last year, people were not positive this was a real space,” Novogratz said by telephone. “Now the question is, how much exposure should I have?”

Galaxy’s asset management division includes venture funds and crypto funds, including those traded on exchanges. Assets, which were $1.18 billion as of Feb. 19, have grown 45% since the end of December after more than doubling in the fourth quarter, the company said.

Novogratz said he plans to add about 50 people to the 126-person company, which has offices in New York, Chicago, Tokyo, Hong Kong, London and Los Angeles. Galaxy Digital has a market value of C$5.5 billion ($4.4 billion), up from C$382 million a year ago.

Some mainstream financial institutions, such as Morgan Stanley’s Counterpoint Global investment management unit, are considering making bets on Bitcoin or are making it easier for their clients to do so. That’s another signal cryptocurrencies have staying power, Novogratz said.

“It’s not a classic FOMO because this is going to be an asset class for the next 50 years,” he said.

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