Core Insights - Hedge funds achieved significant gains in 2025, benefiting from broader stock indexes that ended the year near record highs [1] - The market demonstrated resilience despite volatility caused by uncertainties surrounding U.S. trade policy, as reported by Goldman Sachs [1] Summary by Category Hedge Fund Performance - Hedge funds recorded robust gains in 2025, indicating strong performance in a favorable market environment [1] Market Conditions - Broader stock indexes reached near record highs by the end of 2025, contributing to the positive performance of hedge funds [1] - The market faced volatility due to uncertainties related to U.S. trade policy, yet managed to maintain overall strength [1]

If besting the market was impossible, the market wouldn’t be flooded with investors trying every trick in the book to beat it. Active trading creates the market, but outperforming it with any consistency is extremely difficult. Former advisor-turned-“fin-fluencer” Humphrey Yang would agree with the above. But for Yang, taking on the stock market is a pointless battle for people who want to get rich. The popular social media magnate, who has 1.83 million YouTube subscribers and 3.4 million TikTok followers ...

Core Insights - The number of billionaires has increased significantly from 2,000 in 2017 to over 3,000 today, indicating a growing concentration of wealth [1] Group 1: Wealth Protection Strategies - Billionaires employ various legal tactics to protect their wealth, which can also be applicable to individuals with lower net worths [2] - Portfolio diversification is a common strategy to mitigate risk and maximize returns, with suggestions to diversify beyond just financial portfolios into international real estate and investments [3] - Investing internationally helps reduce country-specific risks, as exemplified by investors like Ray Dalio who advocate for global investments and gold holdings to hedge against inflation and political instability [4] Group 2: Trusts and Asset Protection - Trusts, including irrevocable trusts, grantor retained annuity trusts, and dynasty trusts, are utilized by billionaires to safeguard assets from lawsuits and ensure wealth transfer to descendants [5] - The cost of setting up an irrevocable trust is estimated to be around $1,500 or more, while revocable trusts typically start at approximately $1,000, making these strategies accessible to a broader audience [7]

Investment Sentiment - Billionaires show increased optimism for investments in Western Europe and China over the next 12 months, with 40% and 34% of respondents respectively identifying opportunities in these regions, compared to 18% and 11% in 2024 [2] - The Asia Pacific region, excluding China, also saw a rise in interest, with 33% of respondents expressing bullish sentiment, an increase of eight percentage points [2] - North America has seen a significant decline in popularity as an investment destination, with only 63% of respondents favoring the region in 2025, down from 80% in 2024 [2] Risks Impacting Investment Decisions - Tariffs are cited by 66% of respondents as a major factor likely to negatively impact the market environment in the next 12 months, followed closely by concerns over geopolitical conflicts (63%), policy uncertainty (59%), and higher inflation (44%) [3] Investment Preferences - The most favored asset class for billionaire investors over the next 12 months is private equity, with 49% planning to invest in direct private equity investments [5] - Hedge funds and public developed market equities are also popular, with 43% of respondents indicating intentions to invest in these areas [6] - Emerging market public equities (37%) and private equity funds (35%) follow as the next most popular investment choices, while there is a noted intention to withdraw funds from private equity compared to publicly traded stocks [6] Long-term Outlook - Despite changes in short-term investment outlooks, the long-term views for the next five years have remained relatively stable across most regions compared to 2024 [4]

Financial Data and Key Metrics Changes - As of September 30, the company reported Assets Under Management (AUM) of $989.1 million, with Q3 average AUM increasing to $950.7 million from $760.2 million in Q2 and $789 million in Q1, driven by crypto price movements and positive cash flows into ETP products [3][10] - Q3 revenue was $22.5 million, bringing cumulative IFRS revenues for the nine months ended September 30 to $80 million [3][10] - Q3 effective staking and lending income yield was 3.1%, down from 3.6% in Q2, attributed to lower protocol rewards [3][4] - Q3 operating income was $9 million, with a net income after tax of $3.9 million for the quarter and $33.8 million for the nine months [7][10] Business Line Data and Key Metrics Changes - The company staked approximately 58% of its AUM at the end of Q3, with a management fee yield of 1.2%, slightly up from 1.1% in Q2 due to new management fee-bearing products [4][3] - Valour was highlighted as a major driver of performance, achieving net inflows every month year-to-date, with $38.8 million of inflows during Q3 [10][11] - Stillman Digital generated $2.2 million in trading commissions in Q3, continuing to strengthen its position in institutional trading [11] Market Data and Key Metrics Changes - The company noted a bullish outlook for cryptocurrency prices, with Bitcoin holding around $100,000, and increasing institutional and retail participation expected to drive prices higher [7][10] - The company is optimistic about expanding its addressable market in Europe, particularly in France, where institutional participation is beginning to increase [22][45] Company Strategy and Development Direction - The company plans to focus on maximizing AUM and monetization through new product launches and expanding into new capital pools, including debt markets [41][42] - The recent $100 million equity financing will support increased staking and facilitate ETP market making on a larger AUM base [8][9] - The company is actively seeking creative M&A opportunities to strengthen its long-term growth prospects [9][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong balance sheet and ability to capitalize on market opportunities, despite macroeconomic headwinds [10][14] - The incoming CEO, Johan Wattenstrom, emphasized the importance of maintaining a high focus on core strategies while exploring new geographic markets and product offerings [18][41] - Management acknowledged delays in DeFi Alpha opportunities but reiterated the strength and profitability of the underlying business [5][13] Other Important Information - The company repurchased nearly one million shares for $2.44 million during the quarter, indicating a commitment to returning value to shareholders [12] - The venture portfolio includes 12 private investments, with Amina Bank being the largest, representing 83% of the portfolio's fair value [8] Q&A Session Summary Question: Do Alpha trades carry a liquidity or price liability? - Johan Wattenstrom explained that all market risk for core operations is hedged, with some profit retained in tokens, which may fluctuate with market conditions [35][36] Question: What key message do you want to give long-term shareholders? - Johan Wattenstrom stated that the long-term core strategy remains unchanged, focusing on maximizing AUM and expanding into new product offerings [41] Question: Can you provide insight on the investment pipeline? - Johan Wattenstrom mentioned that the company is looking at various opportunities but remains selective, ensuring that any potential acquisition aligns with long-term strategic goals [59][60] Question: What is the outlook for geographic expansion? - Andrew Forson confirmed that the company is working on geographic expansion and has had success in securing new markets, although specific details cannot be disclosed until regulatory approval is obtained [27][28] Question: What is driving the revenue guidance for Q4? - Paul Bozoki clarified that the company expects to achieve $36 million in Q4, contingent on crypto price movements and operational performance [64][65]

Group 1 - David A. Johnson is the founder and principal of Endurance Capital Management, a New Jersey Limited Liability Company, with over 30 years of experience in investing [1] - The investment strategy includes stocks, bonds, options, ETFs, REITs, real estate, closed-end funds, hedge funds, and private credit [1] - David holds a Master of Science (MS) Degree in Finance, a Certificate in Financial Planning, and an MBA from Fordham University [1]