Ex-SEC Chairman Clayton to Advise One River on Bitcoin (BTC USD) Cryptocurrency

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Photographer: Andrew Harrer/Bloomberg

One River Asset Management, a $2.5 billion firm whose cryptocurrency funds are backed by hedge fund titan Alan Howard, brought on former Securities and Exchange Commission Chairman Jay Clayton as an adviser, lending credibility to an emerging asset class that still lacks comprehensive regulation.

Clayton will be one of three advisers to One River founder and Chief Executive Officer Eric Peters. The other two are Kevin Hassett, who served as chairman of the Council of Economic Advisers under President Donald Trump, and Jonathan Orszag, an economic consultant who previously worked in the Clinton administration.

One River was mainly involved in bets on market volatility until the fourth quarter of 2020, when Peters started a digital asset subsidiary and raised funds from clients including Howard and Ruffer LLP to invest in Bitcoin and Ether. A macro investor, he wanted to develop a strategy that would appeal to institutional investors put off by the breathless boosterism common among the crypto-faithful.

At the time, Brevan Howard had already acquired 25% of Greenwich, Connecticut-based One River Asset Management. Separately, Howard took a stake in the subsidiary, One River Digital Asset Management.

Under Clayton, who left the SEC in December and recently become non-executive chairman of Apollo Global Management Inc., regulators determined Bitcoin and Ether weren’t securities, removing an overhang that could have impeded trading and acceptance of those tokens. He said he welcomed the opportunity to discuss and debate the evolving role of cryptocurrencies and related instruments from the other side of the table.

Embracing Digital Assets

“The digitization of our financial ecosystem isn’t just is coming, it’s already here,” Clayton said in an interview. “Three years ago, I didn’t believe we would be where we are today — the number of respected investors who have embraced digital assets. I would not have predicted this level of take-up.”

Those investors include hedge fund managers Paul Tudor Jones and Ray Dalio, as well as Dawn Fitzpatrick, chief investment officer at Soros Fund Management. Clayton said he doesn’t own any digital assets and isn’t required as part of his advisory role to invest in One River’s funds.

Rather than currency alternatives, Peters sees digital assets as stores of value that can help diversity a portfolio and provide a hedge against inflation at a time when central bank liquidity is distorting prices of traditional investments. His timing was prescient, too.

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