{"id":5641,"date":"2017-10-13T12:12:07","date_gmt":"2017-10-13T12:12:07","guid":{"rendered":"http:\/\/cryptoslate.com\/?p=5641"},"modified":"2026-04-26T15:21:15","modified_gmt":"2026-04-26T14:21:15","slug":"mike-novogratz-500-million-crypto-hedge-fund","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/mike-novogratz-500-million-crypto-hedge-fund\/","title":{"rendered":"Mike Novogratz &#038; the $500 Million Crypto Hedge Fund"},"content":{"rendered":"<blockquote><p>\u201cYou can make a whole lot of money<br \/>\non the way up,\u00a0and we plan on it.\u201d<br \/>\n<strong>&#8211;<i>Mike Novogratz<\/i><\/strong><\/p><\/blockquote>\n<p>His real name is Michael but friends call him <i>Novo<\/i>. And he\u2019s bouncing back. What makes a wrestler, helicopter pilot, billionaire and self-exiled Wall Street hedge fund legend come out of retirement? We were curious to find out \u2013 please continue reading.<\/p>\n<h2>The Early Days<\/h2>\n<p>Michael Novogratz, a.k.a. &#8220;Novo&#8221;, was born in 1964 and raised in the state of Virginia, US. He is one of four siblings \u2013 John and Jacqueline also joined the financial world, while Robert is a popular interior designer and reality-TV celebrity.<\/p>\n<p>In high school Novo excelled at wrestling, almost becoming state champion when awarded runner-up. He continued the sport at <i>Princeton University,\u00a0<\/i>where his studies earned him a bachelor\u2019s degree\u00a0and he was elected wrestling captain in 1986.<\/p>\n<p>In 2007 Novogratz was named as an <i>Outstanding American<\/i> by the <i>National Wrestling Hall of Fame<\/i>, as well as <i>USA Wrestling\u2019s Man of the Year <\/i>during 2010.<\/p>\n<p>Today, he continues to serve as honorary chairman of the <i>USA Wrestling Foundation<\/i>. Novo is also an active board member of various foundations, trusts, a poverty fund, medical center and sits on several committees.<\/p>\n<h3>Life before Wall Street<\/h3>\n<p>After his studies Novogratz did a stint in the <i>New Jersey National Guard<\/i>, serving as a helicopter pilot in its <i>Air<\/i> division.<\/p>\n<p>During 1989 he started a career with <i>Goldman Sachs,<\/i>\u00a0initially as money market salesman and financial trader in Asia. Novo was promoted to partner in 1998 and attained the position of president of operations in Latin America.<\/p>\n<h4><strong>Of Fortress and a school of wisdom<\/strong><\/h4>\n<p>Novogratz joined Wall Street firm\u00a0<i>Fortress Investments<\/i>\u00a0in 2002. He became principal and director of <i>Fortress Credit Corporation<\/i> in 2006, where he primarily focused on running hedge funds.<\/p>\n<p><a href=\"https:\/\/www.fortress.com\">Fortress<\/a> went public in 2007 and Novo\u2019s 66.6 million shares in the Firm skyrocketed him to billionaire status after the IPO price reached $18.50.<\/p>\n<figure id=\"attachment_5938\" aria-describedby=\"caption-attachment-5938\" style=\"width: 300px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5938\" src=\"http:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-foretress-300x137.jpg\" alt=\"\" width=\"300\" height=\"137\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-foretress-300x137.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-foretress.jpg 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-5938\" class=\"wp-caption-text\">Founded in 1998, Fortress manages assets on behalf of over 1,800 institutional clients and private investors worldwide across a range of credit and real estate, private equity and permanent capital investment strategies.<\/figcaption><\/figure>\n<p>Managing funds worth $8.1 billion at Fortress, Novo's activities (which represented about one quarter of the firm\u2019s earnings) yielded returns of almost 10%. He became legendary on the New York hedge fund circuit; he was also remembered for a glitzy lifestyle and flamboyant wardrobe of orange blazers, white business suits, diamond-studded belts, and cowboy boots.<\/p>\n<p>However, during 2008 cracks started to show in Fortress\u2019s macro business; the fund fell by 22% and a further 9.3% in 2011. After more declines in 2014 -partly blamed on Novo\u2019s market calls missing the mark and wrong-way trades &#8211; \u00a0Fortress closed \u00a0during late 2015.<\/p>\n<p>At the time, Novogratz was still optimistic that Fortress could be returned to profit, but with investors\u2019 money leaving, he opted out himself and sold his shares back to Fortress for close to $256 million.<\/p>\n<p>In an exit letter to clients Novo wrote:<\/p>\n<blockquote><p>&#8220;Closing the fund when I'm down runs counter to my DNA, and leaving investors, including family and friends, with losses is not a position I would ever want to be in.&#8221;<\/p><\/blockquote>\n<p>Exiling himself from Wall Street, Novo planned a three-week vacation in India. But before flying off, he visited a friend\u2019s startup, crammed in a warehouse in Brooklyn, NY. It was all about cryptocurrencies, and he got hooked by the dynamic vibe of the 30 young people there; he ended up buying $500,000 of <a href=\"https:\/\/cryptoslate.com\/coins\/ethereum\/\">Ethereum<\/a> (<i>Ether<\/i>) at less than $1 each.<\/p>\n<p>In India, Novogratz attended \u201ca school of wisdom.&#8221; The main message, he says, is that we get what we earn in this life. We should all stop whining and instead address the many opportunities and possibilities that remain.<\/p>\n<p>Novo says that he also learned the key to success at the school: \u00a0Have vision and discipline, and reinforce it daily with an internal mission statement and daily meditation.<\/p>\n<h2>A new Galaxy rises in the digital universe<\/h2>\n<p>By the time Novo returned from India, his investment in Ether had multiplied fivefold in value, prompting him to buy more, following which the price increased even further, to almost $400 in 2017. He sold enough to make his largest ever single-trade profit of $250 million, paid his taxes thereon, and treated himself to a <i>Gulfstream G550<\/i> private jet.<\/p>\n<figure id=\"attachment_5941\" aria-describedby=\"caption-attachment-5941\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5941\" src=\"http:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-ethereal-300x137.jpg\" alt=\"\" width=\"300\" height=\"137\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-ethereal-300x137.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-ethereal.jpg 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-5941\" class=\"wp-caption-text\">At the a conference in New York in June 2017, Novogratz says that cryptocurrencies could become a $5 trillion industry, but they need to develop sound business principles to satisfy regulators and lend legitimacy.<\/figcaption><\/figure>\n<p>Flying high on his recent success (so to speak), Novogratz told <i>CNBC<\/i> earlier this week that he\u2019s back in business. \u00a0He's starting a $500 million crypto hedge fund called <i>Galaxy Digital Assets Fund<\/i>. The seed capital, he says, will consist of his own $150 million and the balance will come from investors &#8211; partners, family and friends.<\/p>\n<p>Saying that he \u201cnever thought&#8221; he\u2019d come out of retirement, Novo now believes that playing the whole crypto ecosystem is the right approach, including <a href=\"https:\/\/cryptoslate.com\/coins\/bitcoin\/\">Bitcoin<\/a>, Ether, blockchain, ICOs and so on. He says that he \u201ccan hear the herd coming\u201d and that \u201cthe space is so exciting right now that I decided to build a business.&#8221;<\/p>\n<p>Asked by CNBC about a possible Bitcoin bubble, Novogratz says it\u2019s possible. \u00a0However, comparing it to the Internet bubble which reached $6.5 trillion in 1999, Novogratz says that with a total market cap of only $200 billion currently, crypto still has a very long way to go.<\/p>\n<p>During <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-09-26\/mike-novogratz-is-set-for-comeback-with-crytocurrency-hedge-fund\">a talk on <i>Bloomberg Markets <\/i><\/a>late last month, a \u201cstill private\u201d Novogratz spokesperson announced that Novo\u2019s two partners in Galaxy will be <i>Richard Tavoso <\/i>and <i>David Namdar<\/i>, both of whom are hedge fund traders with years of experience at firms like <i>RBC<\/i> and <i>Millennium<\/i>.<\/p>\n<p>Between them, the spokesperson said, Galaxy will also offer broader services such as arbitrage, ICOs and market-making (apart from primarily being an investment fund).<\/p>\n<p>Novogratz concluded the Bloomberg interview by saying,<\/p>\n<blockquote><p>\u201cEveryone would love to leave Wall Street gracefully and very few do. You get kicked in the knees or kicked in the midsection, you learn from your mistakes, you kind of rebuild and you start your new adventure.&#8221;<\/p><\/blockquote>\n<p>Welcome back, Novo. Cheers! \u00a0Here\u2019s to vision and discipline \u2013 Wall Street is watching with bated breath.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cYou can make a whole lot of money on the way up,\u00a0and we plan on it.\u201d &#8211;Mike Novogratz His real name is Michael but friends call him Novo. And he\u2019s bouncing back. What makes a wrestler, helicopter pilot, billionaire and self-exiled Wall Street hedge fund legend come out of retirement? We were curious to find [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":5935,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mike Novogratz &amp; the $500 Million Crypto Hedge Fund<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/mike-novogratz-500-million-crypto-hedge-fund\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mike Novogratz &amp; the $500 Million Crypto Hedge Fund\" \/>\n<meta property=\"og:description\" content=\"\u201cYou can make a whole lot of money on the way up,\u00a0and we plan on it.\u201d &#8211;Mike Novogratz His real name is Michael but friends call him Novo. 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