Bankman-Fried bet $45 million on SkyBridge with attached crypto chains

Sam Bankman-Fried paid around $45 million for a 30% stake in SkyBridge Capital, the vast majority of which was immediately invested in cryptocurrencies as part of a deal to boost confidence in SkyBridge Capital’s business. Anthony Scaramucci Fund.

The deal valued SkyBridge at around $150 million, two people familiar with the terms said, but was made on the condition that $40 million of the proceeds be spent on crypto betting. The fund-of-funds manager was valued at around $200 million in 2017.

Scaramucci said this week that the cash injection from Bankman-Fried’s FTX Ventures proves SkyBridge has a long-term future after suffering losses from falling digital asset prices.

“If you have $50 million of liquid assets on your balance sheet, people don’t think you’re going to go bankrupt,” Scaramucci told reporters during his conference Monday. “It was very important for me to say that SkyBridge is set up for the next 20 or 30 years.”

Scaramucci wouldn’t discuss the exact terms of FTX’s deal with SkyBridge, but said he was offering Bankman-Fried’s vehicle a three-year option to acquire 85% of his fund group.

Scaramucci said the FTX deal was the product of poor performance in a poor market and that SkyBridge, which has $2.8 billion in assets under management, was down 25% this year.

The investment brings together two leading figures in the markets. Scaramucci briefly served as White House communications director under former President Donald Trump and hosts the Salt Financial Conference, which met this week in New York.

Billionaire Bankman-Fried runs FTX, one of the largest crypto exchanges in the world, and has recently deployed his fortune as a savior to struggling businesses in the crypto industry.

SkyBridge has always invested in hedge funds, but Scaramucci turned to cryptocurrencies by becoming a public supporter of digital assets. Sixteen percent of the fund was in crypto ahead of the 2022 selloff, he said, a figure that fell to 8 percent as the value of digital tokens fell.

“Bear markets suck,” Scaramucci added. “If I was doing great right now – our performance is poor, lackluster – who knows if we’d make the trade.”

Scaramucci said the FTX deal was decided over a two-hour lunch at a hotel in the Bahamas, where Bankman-Fried is based. Scaramucci was with his family on a Disney cruise that had docked in the islands.

He said he proposed a lunch to discuss the possibility of a partnership – as well as to avoid going to a water park with his children. He was initially looking to sell just 15% of his group of funds.

SkyBridge holds the newly purchased cryptocurrencies on its balance sheet, rather than in its funds.

“We didn’t need Sam’s money. . to run the business,” Scaramucci said. “We don’t use the proceeds for anything other than balance sheet commitment.”

He said the deal with the crypto entrepreneur had a three to five year horizon and if Bankman-Fried fully exercised the option to increase its stake in SkyBridge, Scaramucci would own the remaining 15%.

Holding a newspaper illustration of himself on a sinking ship laden with cryptocurrencies, Scaramucci said he was not concerned about those who doubted his company’s future. “I don’t care . . . I framed it and put it in my office.