This Hedge Fund Trying to Become the Top Pod Shop in Crypto is Rethinking the Multi-Manager Hedge Fund Model | Anatoly Crachilov of Nickel Digital

Episode Summary

Executive Summary: Nickel Digital’s CEO Anatoly Kratzalov explains why the firm shifted from single-manager to a pure multi-manager crypto hedge fund, emphasizing diversified pods, strict market-neutral risk controls, and institutional-grade custody. The episode details Nickel’s rapid pod growth, talent model, execution advantages, and how crypto’s maturation is attracting more institutional allocators despite volatile market conditions.

Main Topics: From single-manager to multi-manager structure (Priority: 5/5): Nickel was built around a multi-manager vision from the start, but only scaled into it after AUM and infrastructure allowed diversification across strategies and teams. Pod selection, incubation, and scaling process (Priority: 5/5): New teams start with small test capital, are monitored on live trading and risk metrics, and only scale after statistical confidence is established. Technology, execution, and risk infrastructure (Priority: 5/5): Nickel argues its in-house tech stack, low-latency execution, and risk systems are essential to supporting many pods and improving returns. Talent model and manager incentives (Priority: 4/5): The firm competes by offering independence, no exclusivity, no non-competes, IP respect, and potentially higher payout shares than traditional multi-managers. Institutional adoption and fundraising environment (Priority: 4/5): Allocator interest has evolved from education and skepticism to real capital from family offices, pensions, endowments, sovereign wealth, and fund-of-funds. Custody, counterparty risk, and post-FTX standards (Priority: 4/5): Nickel insists on third-party custody and exchange settlement structures so client capital never touches exchanges, framing this as a non-negotiable institutional standard. Market regime shifts and 2025 performance (Priority: 3/5): The firm says 2025 has been tough for many pod managers due to tariff-driven noise and broken correlations, making it a strong test environment for strategies.

Key Arguments: Multi-manager is superior to single-manager because it diversifies across strategies and teams instead of relying on one decision-maker. Crypto’s fractional trading allows meaningful live testing with only $100K, which is not feasible in many traditional markets. Nickel does not trade alongside its pods or run a central book, avoiding conflicts of interest and capacity competition. Execution quality matters materially; some managers saw up to a 12% annualized difference when trading through Nickel’s platform versus their own setup. The firm is willing to pay managers up to 50% of P&L at the source for exceptional performance, while Nickel itself still charges its own fund-level fees. No non-competes, no exclusivity, and no IP restrictions are used because the firm wants a partnership model, not an employment model. Institutional-grade custody and tripartite settlement structures are essential after FTX, making exchange counterparty risk unacceptable. 2025’s volatility and regime changes have made it harder for managers, but also created an unusually good stress test for the platform and risk systems.

Data Points: Firm headcount: 30 people - Nickel’s size after six and a half years in business Software engineers: Roughly half of the firm - Technology-heavy model focused on risk, execution, and margin systems Start year as trading business: 2018 - Nickel began as a single-manager fund Launch of fund: June 2019 - Initial fund launch before multi-manager expansion Multi-manager launch: 2021 - Added multi-manager vehicle after reaching scale Merger of vehicles: 2023 - Single-manager and multi-manager vehicles merged into one Pods at start of 2025: 35 - Platform pod count at the beginning of the year Pods by end of September 2025: 74 - More than 100% growth in nine months Target pod count for 2025: 100 - Management goal for the year Longer-term pod target: 150-200 - Planned expansion in future years Teams reviewed over the years: 1,600 - Prospective pod managers screened by Nickel Selection rate: A couple of percentage points - Low acceptance rate given selective underwriting Initial test allocation: $100,000 - Standard starting capital for all new pods Largest current allocation: $50 million - Nickel’s largest allocation to a pod today Minimum desired allocation: $5 million - Below this, the strategy may not be worth engaging Ideal allocation range: $10-20 million - Preferred core allocation size per manager Client return target: 15-20% net - Target annual return communicated to investors Pod-level target return: 20-25% - Implied level needed to deliver client target after fees Preferred risk metric: Sortino ratio - Used instead of Sharpe because downside volatility matters more Entry hurdle for managers: Sortino of 2 - Minimum benchmark for meaningful payout potential Top payout to managers: Up to 50% of P&L - For exceptional performance, at source Reported correlation to Bitcoin: Negative 0.01 over last 12 months - Illustrates market-neutral portfolio profile Volume traded last year: Over $100 billion - Shows scale behind execution advantages Stress-day trading volume: $10 billion in one day - Referenced during October 10 market dislocation Worst quoted bid-ask spread: 250 bps - Example of extreme market dislocation during sell-off Pods stopped after stress event: 6 pods - All were in testing stage, limiting damage Strong performers in scale-up stage: 9 pods - Managers that performed well through the stress event Annualized execution improvement: Up to 12% - Difference between trading through Nickel infrastructure versus direct venue trading Client/investor base: Over 100 investors - Current investor count for Nickel

Pivotal Quotes: "We always thought that a multi-manager is a far better implementation than a single manager hedge fund." — Anatoly Kratzalov: Explaining why Nickel moved toward a diversified pod structure "We will not be competing with our pods, we will not be running these overlays." — Anatoly Kratzalov: Describing Nickel’s decision not to run a central book or alpha-capture overlay "Instead of being East Berlin, we're following the logic of West Berlin." — Anatoly Kratzalov: His analogy for using incentives rather than non-competes and restrictions to retain talent

Implications: The episode suggests crypto hedge funds are becoming more institutional, with better custody, stronger execution, and broader allocator adoption. For managers, the message is that risk control and adaptability now matter as much as alpha.