Former LedgerPrime Employees Launch Split Capital Hedge Fund Focused on Liquid Tokens

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Former employees of crypto trading firm LedgerPrime have unveiled a new hedge fund named Split Capital, focusing on liquid tokens. Split Capital’s founders include Zaheer Ebtikar, Michael Churchouse, and Nai Boonkongkird, with Shiliang Tang, former chief investment officer at LedgerPrime, serving as an advisor.

It's been a long time coming but I'm thrilled to announce the official launch of Split Capital, a liquid digital assets fund.

Split Capital, as a concept, has been in my mind for years now and it's been a dream to finally see it come to fruition.https://t.co/cItdgFl3Ao

— Zaheer (@SplitCapital) January 19, 2024

Also, the primary backers of Split Capital include Novi Loren, UTXO Management, and Dan Matuszewski, co-founder of CMS Holdings. However, the fund size has not yet been disclosed, citing regulatory restrictions.

Notably, the fund aims to adopt a longer-term approach to token investments, contrasting with the common strategy of divesting once digital assets become liquid, often seen in venture capital firms active in the crypto space. Split Capital is designed for investors seeking a more extended investment horizon.

Ebtikar posted to X on Friday, saying,

“It’s been a long time coming, but I’m thrilled to announce the official launch of Split Capital, a liquid digital assets fund. Split Capital, as a concept, has been in my mind for years now, and it’s been a dream to finally see it come to fruition.”

Zaheer Ebtikar emphasized that the fund’s strategy involves considering the long-term potential of tokens. As an example of what types of tokens Split Capital might focus on, Ebtikar pointed out a recommendation he and his team made in December 2022 when they recommended buying Solana, Lido, and Synapse.

Split Capital argues that the middle 80% of the token market often gets overlooked due to short-term incentives. Ebtikar expressed the intent to support crypto projects over longer time frames, aiming to contribute to building a more robust ecosystem. Futhermore, Ebtikar emphasized being more founder-aligned and avoiding the tendency to move on quickly once assets become liquid, as often seen in the industry.

Split Capital Takes a Long-Term Approach to Token Investments

Before the launch of Split Capital, Zaheer Ebtikar, the co-founder, worked as a portfolio manager at LedgerPrime, a trading firm acquired by FTX in 2021. LedgerPrime’s transition to operating under the umbrella of Alameda and FTX’s U.S. subsidiary and its involvement in FTX’s bankruptcy created challenges.

Ebtikar worked as a portfolio manager for a year before leaving in September 2023, according to his LinkedIn profile. Churchhouse also worked on the DeFi investing team at Nickel Digital Asset Management.

Ebtikar, along with Michael Churchouse and Nai Boonkongkird, founded Split Capital, aiming to take a longer-term perspective on token investments compared to typical crypto venture capital structures. The founders express dissatisfaction with the short time horizons prevalent in crypto VC, often driven by the liquid nature of token investing.

Split Capital believes the incentive structures of traditional crypto venture capital can harm the overall market. The fund intends to invest in less-popular tokens, seeking undervalued investments and contributing to the ecosystem’s growth beyond speculation.

Ebtikar argues that the majority of capital in crypto is venture money with a mandate to buy early, evangelize, and sell at a premium, emphasizing the need for a different approach. The fund’s focus is on finding value in long-term investments rather than pursuing short-term gains.

Despite challenges and the fluid nature of the crypto landscape, Split Capital is registered with the Commodity Futures Trading Commission (CFTC), emphasizing its commitment to regulatory compliance and responsible trading practices. The fund launched earlier this month with optimism about its uniqueness in the crypto market.

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