Galaxy Digital Announces First Quarter 2018 Financial Results
Galaxy Digital LP ("Galaxy Digital", the "Company" or the "Firm"), a diversified, multi-service merchant bank dedicated to the digital assets and blockchain technology industry, released its audited financial results for the first quarter ending March 31, 2018 ("Q1 2018" or "the first quarter"), as well as business and operational updates through the date of this press release.
"I am very proud of the progress that we have made since the beginning of the year," said Galaxy Digital CEO, Michael Novogratz. "We have assembled a world-class team with deep institutional knowledge and expertise and have also made significant strides in scaling our four core business lines. I have complete confidence in our team's ability to continue driving growth and believe the Company is strategically positioned to help further institutionalize the digital assets and
blockchain technology industry."
As previously announced in a letter of intent published on January 9, 2018, Galaxy Digital is expected to complete a proposed transaction whereby Galaxy LP and First Coin Capital Corp. ("First Coin") will combine to form Galaxy Digital Holdings LP ("GDH LP"), an operating partnership that will be managed by the principals of Galaxy LP. Bradmer Pharmaceuticals Inc. ("Bradmer") will acquire and hold a minority investment in the operating partnership, and, upon completion of the Arrangement, is expected to change its name to Galaxy Digital Holdings Ltd. and resume an active public listing on the TSX Venture
The resulting firm will have over 70 employees with deep institutional experience spanning across technology, investing, advisory, and
trading. The Firm has also invested significantly in its management, operations, legal, and finance departments.
Galaxy Digital's Asset Management business partnered with Bloomberg to launch the Bloomberg Galaxy
Crypto Index, an index designed to track the largest and most liquid U.S. Dollar-traded cryptocurrency pairs.
Galaxy Digital's Trading business opened an office in Tokyo and committed resources to its execution, operations, and technology to expand execution of all trading strategies to 24 hours a day.
During the first quarter, Galaxy Digital's Trading team also effectively managed the performance and overall risk of its Principal Trading book by strategically liquidating, shorting, trading, and reinvesting in liquid cryptocurrencies.
Galaxy Digital's Principal Investments business has invested $86.8 million ($96.8 committed) across eleven investments and six add-on acquisitions since the start of 2018 to date.
Galaxy Digital's Advisory business served a wide variety of clients with blockchain and digital assets solutions. The Advisory team will be broadening its capital services offerings, including sales planning for Initial Coin Offerings, developing advanced structured tokenomics and governance models, organizing members and party incentives for a blockchain consortium, standardizing the securitization of physical assets and properties into security
tokens, and continuing to provide management consulting services to early stage start-ups. Additionally, the Advisory business will provide traditional investment banking services such as M&A advisory and corporate restructuring.
Select Financial Highlights (Q1 2018)
As previously announced, on January 9, 2018, Michael Novogratzcontributed approximately $302 million of assets to the Company, which were previously held through Galaxy Group Investments LLC ("GGI"), the initial limited partner of Galaxy Digital. The assets are intended to be used towards building a full-service merchant banking business in the digital assets and blockchain technology space.
On February 7, 2018, the Company entered into a $100 millionRevolving Loan Agreement (the "RLA") with GGI as a source of additional capital to fund its operations and prospective investments until such time that the plan of arrangement among Bradmer, Galaxy Digital and First Coin (the "Arrangement") is complete. As of March 31, 2018, the Company owed an aggregate $78.8 million under the RLA, which it intends to repay upon closing of the Arrangement.
Cash and partners' capital stood at $41.8 million and $169.7 million, respectively, as of March 31, 2018, with an additional $21.2 million of availability under the RLA. Additionally, the Company had $73.1 million in highly liquid digital assets which can be converted into cash on a short-term basis.
As of March 31, 2018, digital assets and investments totaled $225.8 million, largely a result of $109.6 million of unrealized depreciation during the quarter.