Key Takeaways
- • Lockheed Martin's retirement plans are reported among the backers of crypto prime broker Hidden Road, according to the Financial Times, citing people familiar with the matter.
- • Hidden Road, founded in 2018 by Marc Asch, a former SAC Capital and Point72 executive, enables hedge funds to take larger leveraged crypto positions.
- • Hidden Road raised $50 million in July 2022 from Citadel Securities and the investment arms of FTX and Coinbase, and was negotiating with global banks and hedge funds by the end of August.
- • The Financial Times reported the firm sees itself as a private-equity-style entity raising external capital rather than a traditional bank prime broker, a model one investor described as "prime brokering on steroids."
- • Pension exposure to crypto remains contested: two Canadian pension plans, Ontario Teachers' and CDPQ, took losses on FTX and Celsius investments.
Summary
Lockheed Martin's retirement plans are among the supporters of Hidden Road, the London-based crypto brokerage, the Financial Times reported on Wednesday, citing people familiar with the matter. The investment marks what Blockworks describes as the latest indirect entry by pension funds into cryptocurrencies in pursuit of higher returns. Hidden Road and Lockheed Martin did not respond to Blockworks' request for comment by press time.
Hidden Road was established in 2018 by Marc Asch, who previously worked at Steve Cohen's SAC Capital and Point72 Asset Management. The firm initially focused on foreign-exchange offerings before expanding into digital assets. According to the FT, the company views itself more as a private equity outfit that raises external capital than as a traditional bank prime broker. A crypto prime brokerage provides leverage to clients such as hedge funds, extending credit to amplify trading positions. To manage risk, Hidden Road uses a real-time system that sets trading limits and requires upfront collateral. Blockworks notes that if a client incurs heavy losses, the prime broker or its investors may have to absorb them.
Hidden Road secured $50 million in funding in July 2022 from backers including Citadel Securities and the investment units of FTX and Coinbase. By the end of August, the firm was reportedly negotiating with leading global banks and hedge funds to help manage its crypto risk. Blockworks reported the previous year that Hidden Road faced difficulties tied to its FTX involvement, after which its X/Twitter content was removed.
The move comes with cautionary context. Two Canadian pension plans, Ontario Teachers' Pension Plan and CDPQ, sustained losses on investments tied to FTX and Celsius in the prior year. One investor cited in the FT pointed to the risks of depending on external capital for a firm of this structure.
Hidden Road was established in 2018 by Marc Asch, who previously worked at Steve Cohen's SAC Capital and Point72 Asset Management. The firm initially focused on foreign-exchange offerings before expanding into digital assets. According to the FT, the company views itself more as a private equity outfit that raises external capital than as a traditional bank prime broker. A crypto prime brokerage provides leverage to clients such as hedge funds, extending credit to amplify trading positions. To manage risk, Hidden Road uses a real-time system that sets trading limits and requires upfront collateral. Blockworks notes that if a client incurs heavy losses, the prime broker or its investors may have to absorb them.
Hidden Road secured $50 million in funding in July 2022 from backers including Citadel Securities and the investment units of FTX and Coinbase. By the end of August, the firm was reportedly negotiating with leading global banks and hedge funds to help manage its crypto risk. Blockworks reported the previous year that Hidden Road faced difficulties tied to its FTX involvement, after which its X/Twitter content was removed.
The move comes with cautionary context. Two Canadian pension plans, Ontario Teachers' Pension Plan and CDPQ, sustained losses on investments tied to FTX and Celsius in the prior year. One investor cited in the FT pointed to the risks of depending on external capital for a firm of this structure.
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