Skybridge Funds Face Liquidity Crunch: What Investors Can Do
SkyBridge is a famous, some would say infamous alternative asset manager. It is one of the largest sponsors of hedge fund vehicles that use the transparent 40 act fund structure known as a tender offer fund. SkyBridge Multi Adviser Hedge Fund Portfolios and SkyBridge G II Fund LLC each offer exposure to some of the top brand name hedge fund managers including Third Point and Point72. Both funds also have significant crypto exposure.
SkyBridge Tender Offers Oversubscribed
However, in recent months SkyBridge’s tender offer funds have faced a liquidity crunch. The most recent repurchase offers for SkyBridge’s tender offer funds were wildly oversubscribed. SkyBridge Multi Adviser Hedge Fund Portfolios repurchased just 8% of tendered shares in the most recent tender offer, as indicated in a May 12 filing. SkyBridge G II Fund repurchased just 11% of tendered shares according to a May 12 filing. Note that according to the prospectus for each fund, any repurchase plans are at the discretion of each fund’s respective board of directors.
This is the third time in three years that SkyBridge has faced major redemption requests, according to a recent Citywire article. In 2020, they were also faced with nearly $1 billion in redemption requests following a period of poor performance, and sell recommendations from analysts at Merrill Lynch and Citi.
FTX Bankruptcy Limbo
Anthony Scaramucci, the founder of SkyBridge, is no stranger to controversy. Six months ago, Sam Bankman Fried’s crypto exchange, FTX, bought 30% of SkyBridge Capital. Now Bankman-Fried potentially faces decades in prison for fraud and money laundering. FTX’s minority stake in SkyBridge is in “bankruptcy limbo.” SkyBridge Multi-Adviser Hedge Fund Portfolios also owns common and preferred stock in FTX Trading Ltd, although these investments were marked at zero in the latest portfolio disclosure.
Liquidity for SkyBridge Investors
Investors that hang on to their shares may very well be rewarded with long term outperformance. Scaramucci also told Citywire that their Series G fund is having their best year since 2012. However, some investors may be concerned with headline risk from the FTX bankruptcy, or need liquidity as soon as possible. Unfortunately, they face limited options, because there is no active secondary market for interests in any of SkyBridge’s funds. According to the prospectus for each fund, manager approval is required for any transfer between investors.
In certain circumstances, Alternative Liquidity Capital will consider purchasing interests in SkyBridge Multi-Adviser Hedge Fund Portfolios and SkyBridge G II Fund LLC. Please visit Alternative Liquidity Capital’s website, or email email@example.com for more information.