Hedge Fund Presidio Trading to Spin Out Crypto Market Tail Risk Strategy

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Quant hedge fund Presidio Trading plans to spin out its crypto market tail risk strategy into a standalone fund following the strategy's outperformance this year, willcanny99 reports

“Many current and prospective investors in our multi-strategy fund were interested in learning about our tail risk strategy and if we could provide them with access to the strategy through a standalone vehicle,” said Christoper Kvamme, founder and CEO of Presidio Trading.investment strategies

look to reduce overall portfolio risk by outperforming during an unexpected downturn, but do so at the cost of lower returns in a bull market. “It's not just other funds and investors who can benefit from protection against nonlinear drops in cryptocurrency markets. I think this new fund will be valuable to the entire crypto ecosystem; exchanges, payment processors, project endowments, and really anyone with significant exposure to crypto,” Kvamme said.

The new fund will make some slight changes to the existing tail risk strategy. While the strategy can post positive returns when markets decline, its current design returns losses when digital assets are performing well. The strategy will be tweaked to provide broader protection, most likely by covering a cryptocurrency index, the firm said.

The Dallas, Texas-based firm said it is planning to open the fund to accredited investors in the first quarter of 2023, with a limited capacity of $10 million to start.

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