This is the April 2018 installment in a series of posts about new commodity pool launches. This post covers January through March 2018. The data was collected on April 9, 2018.

When I was looking over the data, a number of crypto-currency related pools caught my eye. Intrigued, I decided to find all the crypto-pools I could and provide an extra table listing them. I also put together a little chart showing the explosive growth in their number. See below for details.

Highlights

The rate of pool registrations was around 182 per week over the last three months. That’s higher than the approximately 140/wk we saw in the last quarter of 2017. This post covers just over 12 weeks and saw 2239 pools registered. The big name firms in total were registering pools at a rate of 27/week, well below the 40 we saw in January. This is the second time I have used my improved cross-referencing process to identify members of affiliated groups with large AUM (>$10bn). That means we are now comparing apples-to-apples going from one report period to the next. My guess is that the larger companies operate according to an annual planning cycle that involves setting up a lot of funds in the fourth quarter ready for the new year.

Firms Establishing a Large Number of Pools

• BlackRock with 51, including a set of target-date funds and some Ishares products. There was also a pool named “Abbey Fund”. I am wondering if that is to do with the Irish Fund of Funds specializing in CTAs?
• Goldman Sachs with 32 pools. There were 11 “Private Equity” products and a further 10 including “PEA” in the name – possibly also Private Equity?
• Invesco registered 13 pools, including 9 under the “Closed End Strategy” moniker.
• Prudential Global Investment Management weighed in with 22 new pools, 14 in the Dryden series of debt-related strategies.
• Schroder formed 16 pool, 10 of which were target date pools.
• State Street also registered 16 pools, mostly Russell and MSCI products.
• T Rowe Price was up there with 18 pools, nearly all target date funds.

News About Famous Hedge Fund Management Firms

• Angelo Gordon added 8 pools in their Twin Brook Capital Funding series.
• AQR added 6 pools – including an “adaptive” multi-asset fund, a buy-write fund, long-only equity beta, a systematic total return fund, and short biased fund. I guess that covers the waterfront!
• Bridgewater registered a new (third) Pure Alpha Fund.
• D E Shaw added to its Alkali Fund products (the fourth in the series).
• GMO jumped on the climate change bandwagon with the GMO Climate Change Investment Fund. I am waiting for someone to launch an “All Weather” climate change fund.
• Man Group registered a couple of “Liquid Private Equity Alternative” pools – it will be interesting to see if they get traction. I would love to know how they work too. How do you package a notoriously illiquid product in a liquid wrapper?
• Vanguard registered 7 pools, all of which are factor oriented.
• Also appearing on the list: Blackstone, Millennium, Valueact, UBS, and Wellington.

Please let me know in the comments if this kind of overview is helpful, or if there is something of particular interest to you that you would like me to address.

Primer on Hedge Fund Structure and Data Sources

A hedge fund is typically registered as commodity pool, and the underlying strategy can often be inferred from the name. New pool registrations give you useful market and competitive information! If nothing else, you may get a heads-up that a competitor is bringing something new to market.

The source of data is the National Futures Association’s (NFA) Background Affiliation Status Information Center (BASIC) website. These posts run in parallel with my other series on biggest hedge funds by regulatory assets under management. That series uses data sourced from the SEC’s Investment Advisor Public Depository website.

Between 400 and 800 new pools are registered with the NFA each month, so I don’t have space to list them all here. I limit the table to those pools registered by the largest hedge fund firms. This way you can see the latest product-related strategic moves being made by the biggest players.

 Crypto Pools

While scanning of the latest couple thousand new pools, the terms “crypto” and “blockchain” kept jumping out at me. So I took a closer look.

I combined together all the pool data I have. This amounts to 125,321 pools with some duplication as there are sometimes co-managers. I searched both the pool name and the pool operator fields for the following terms: “bit”, “block”, “chain”, “coin”, “crypt”, and “krypt”. Not sure about that last one!

I grabbed the pool ID, pool name, commodity pool operator and CPO ID for any matches. I then eliminated from this sub-set of pools, any pool names and pool operators containing the following terms: “ambit”, “arbit”, “artbit”, “bitstream”, “bitt”, “block island”, “blocked”, “blocker”, “coinv”, “ecointense”, “exhibit”, “kryptonite”, “orbit”, and “qubit”. Finally, I visually pruned out a handful of clearly non-crypto-related names.

I was left with 62 pools. No duplicates. Some of the pools do not seem likely to be crypto-related but I kept them in just-in-case since the list was relatively short. I also decided to plot the cumulative number of crypto-pools vs. their Pool ID. Since Pool IDs are given out in numerical order, and at a fairly constant rate, Pool ID is a fair proxy for time. In this way we can get a feel for the growth of crypto-pools.

Here is a table containing a list of all the potential crypto-pools:

Get the Raw Data

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Methodology

In order to complete the research for this post, I made use of a script in R using the RSelenium package. I have previously published a post about how to set up RSelenium using the latest version of Selenium, and an earlier post reviewing some of the most useful functions in the package. This package makes it possible to automate the collection of data from websites; the process is called web-scraping.

The NFA assigns pool ID numbers in numerical order. I start with the most recently identified pool and increment the pool ID, then search in BASIC for that pool. If the pool is found, I record the name(s) and ID(s) of the Commodity Pool Operator(s). I also check for the date the pool ceased trading futures or ceased trading altogether, to ensure I do not include dead pools. I keep going until I run out of pools (I check at least 100 successive pool IDs have no pool associated with them).

Finally, for the purpose of this post, I purge the list of pool operators who do not appear on my largest hedge funds master list. Note that this list includes 7000+ firms who are affiliated with the 500 or so largest hedge fund companies.

Image Source: Underwater Coins by Ch0oky7 at DeviantArt (it’s not all manga you know).