Michael Novogratz, “Novo”, – wrestler, helicopter pilot, billionaire and self-exiled Wall Street hedge fund legend has now come out of retirement to set up what is set to be the world’s leading crypto hedge fund.
Born in 1964 and raised in the state of Virginia, US, Novogratz is one of four siblings with brother Robert a popular reality-TV celebrity.
In high school Novo excelled at wrestling, before heading to Princeton University to become wrestling
captain and earning his bachelor’s along the way. In 2007 he was named as an Outstanding American by the National Wrestling Hall of Fame and awarded Wrestling’s Man of the Year in 2010.
In 1989, Novogratz began his career in finance with Goldman Sachs, initially as a money market salesman
and financial trader covering the Asia region. He was promoted to Partner in 1998 at which point he attained the position of President of Goldman Sachs Latin America.
Novogratz moved onto Fortress investments in 2002 and subsequently became director of Fortress Credit Corporation in 2006 where he ran a number of hedge funds.
Fortress went public in 2007 and Novo’s 66.6 million shares in the Firm skyrocketed him to billionaire status after an IPO which hit $18.50 per share.
Managing funds worth $8.1 billion and consistently yielding returns of almost 10%, he became legendary on the New York hedge fund circuit and noted for a somewhat glitzy lifestyle and flamboyant wardrobe which includes a set of orange blazers, diamond-studded belts and cowboy boots.
The 2008 Crash
However, on the back of the 2008 crisis there was a significant decline in the firm’s turnover and some tarnish began to appear on a halo which had otherwise glistened up until then.
Leaving Fortress and selling out his position within the firm for a cool $256 million, Novogratz began looking for new horizons which landed into his seemingly hallowed lap during a passing visit to a friend’s start-up operation that sat crammed in a small Brooklyn warehouse which specialised, in part, in Crypto-mining.
Novogratz was immediately fascinated by the Bitcoin concept which, as it happens, also appeared to him as a bubble.
“However, this is going to be the largest bubble of our lifetimes,” he told Bloomberg, “and prices are going to get way ahead of where they should be. [But] you can make a whole lot of money on the way up, and we plan on it.”
Like others, he compares the crypto phenomenon to the tech bubble of the early noughties but has also made the observation that the current total market cap of the crypto markets (c. $200 bn USD at the time of writing) is a mere fraction of the $6.5 trillion bubble reached by the tech explosion which began in the late nineties.
“There’s a long way to go,” he says, which presumably underpins his motivations for setting up what
looks set to be the world’s largest crypto-hedge fund, the Galaxy Digital Assets Fund, which will
dabble both in cryptocurrency trading and ICO investments.
He is also planning to inject $150 million of his own money into the project – a move that leaves Wall Street holding its breath as he seeks to rebuild a tarnished image.
“Everyone would love to leave Wall Street gracefully and very few do,” he points out. “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.”
We should be in for a ride…