Xapo Bank teams up with trading firm Hilbert Group to launch $200m Bitcoin fund

Hilbert Group partners with Xapo Bank to launch a Bitcoin-denominated hedge fund with over $200 million in expected capital.

Quantitative investment company Hilbert Group has announced a strategic partnership with crypto-friendly Xapo Bank to manage a new Bitcoin-denominated hedge fund.

In an Aug. 27 press release, the Stockholm-headquartered company said that the fund, set to launch in September, is expected to attract over $200 million in initial capital from Xapo Bank and other investors throughout 2024.

The idea behind the initiative is to provide corporates, businesses, and professional investors with opportunities to “generate returns in BTC from institutional-grade structured credit arrangements, which are not available to those participants directly in the market,” the press release reads.

Joey Garcia, director at Xapo Bank, called the fund a “natural evolution of the asset class,” as the company wants to offer the right products for participants in the space who are aiming “not only for exposure to the Bitcoin price, but also structured ways to grow the Bitcoin value.”

The fund will charge lower fees compared to Hilbert’s other hedge funds, which typically operate on a “2% and 20%” fee structure. Niclas Sandström, CEO of Hilbert Group, expressed optimism about the partnership, noting that over the last 12 months, the company developed a “close and strategic relationship” with Xapo Bank, adding that the both are expecting the fund to “grow significantly over the coming year.”

The latest initiative follows Xapo Bank’s recent milestone as the first bank in the U.K. to offer interest-bearing Bitcoin (BTC) and fiat accounts after successfully extending its banking license to operate in the country.