- Risk assets are falling in tandem as the macro environment sends increasingly bearish signals.
- Christian Angermayer took the opportunity to double down on his psychedelic stock holdings.
- The German billionaire explains his high conviction and why he is “extremely bullish” on bitcoin.
Amid the triple whammy of a protracted war in Europe, surging inflation, and the
hiking interest rates into tightening financial conditions in much of the developed world, investors have nowhere to hide from the market turbulence as risk assets fall in tandem.
Even billionaires cannot escape the brutal impact of a rapidly shifting macro environment.
“2022 has been a loss year in terms of valuation but not a loss year in terms of building great companies,” Christian Angermayer, who runs his $3.5 billion family office Aperion Investment Group, told Insider in an interview.
The 44-year-old German billionaire dropped out of university at the age of 21 to help start a biotech company in 2000 that eventually became Alnylam Pharmaceuticals (ALNY), which has a
Atai Life Sciences (ATAI), which focuses on psychedelic treatment for mental health disorders.of more than $17 billion today. In 2018, he founded the psychedelics startup
In June last year, the Peter Thiel-backed company became the third psychedelic biotech to go public in the US after MindMed (MNMD) in April and Compass Pathways (CMPS) in September 2020. Angermayer also owns a stake in Compass Pathways through Atai Life Sciences.
A teetotaler, he began to bet on the long-term medicinal potential of psychedelics after trying magic mushrooms for the first time in a Caribbean country where usage is legalized. The “trip” ended up being the “single most meaningful” experience in his life and later gave him the creative boost to start investing in crypto assets, he told Insider in a September interview.
Through his family office, Angermayer is the largest institutional investor in blockchain software company Block.one, which created the EOS token and holds more than 170,000 bitcoin. Along with a coterie of billionaires that include Angermayer, Block.one launched and capitalized crypto exchange Bullish Global with about $10 billion in digital assets and cash in May 2021.
From psychedelics to crypto, the bets worked out well as ample
and bullish sentiment in the market propelled growth stocks and cryptocurrencies to all-time highs in 2021.
Doubling down in a challenging market environment
Things have looked less buoyant since the Fed signaled its intention to hike rates and tighten financial conditions to rein in inflation. Under such circumstances, stocks have been stuck in what seems like a perpetual downward spiral while cryptocurrencies are trading like leveraged versions of high-growth tech stocks.
So far this year, Atai has tumbled more than 40% and Compass Pathways has fallen almost 60%. The Horizons Psychedelic Stock Index ETF, which tracks the North American Psychedelics Index, is down 76% from its peak in February last year. The global crypto market cap has retreated to $1.84 trillion from a peak of $3 trillion last year.
“Last year, everything was priced for perfection,” Angermayer said. “My feeling at the moment is that everything is priced for the worse. The mood is so depressed that I think there is room for positive surprises.”
Indeed, the serial entrepreneur has doubled down on his investments in the psychedelics sector by extending the lockup of his pre-IPO shares of Atai by another two years, he announced in a LinkedIn post in December. In April, he increased his stake in the company via a capped call of one million shares, according to a regulatory filing. (The transaction would pay off if Atai stock doubles by March 2025.)
“As a founder, obviously, I really deeply believe that Atai is worth much more,” he said. “In this challenging public market environment, investors don’t look at the quality difference when everything is going down. My conviction is that once markets stabilize and start going up again, investors will choose high-quality companies in the sector.”
In his view, many biotech companies claim to be involved with psychedelics without having a clearly defined strategy, viable business model, and intellectual property, including patents.
“As these companies struggle to survive, this might give casual observers the feeling that the entire sector is in trouble,” he said. “In my opinion, however, these struggling companies should have never gotten funding in the first place.”
He explains that it is critical to separate the wheat from the chaff in the psychedelics sector because the medicinal use of psychedelics requires a clear regulatory pathway for approval, experience and expertise in conducting clinical trials, as well as intellectual property protections.
“Throughout their history, psychedelics have been highly regulated, often through religious practices, and were administered under strict guidelines and with a certain protocol, not dissimilar from what we strive to create, just with different gatekeepers,” he said, adding that medical doctors now help guide users instead of shamans.
Ultimately, his conviction in the space is rooted in his belief that mental health and the pursuit of happiness are paramount in a modern world where the race for technological advancement is relentless.
“I do think that people were happier because I think our mind is deeply made for continuity,” he said. “But if you look at the world today, it’s anything but continuity, it’s speed and record innovation.”
‘Extremely bullish’ on bitcoin
Despite the mental health issues that have accompanied rapid innovation, Angermayer said he remains “extremely bullish” on bitcoin — a financial innovation in and of itself.
That’s because he believes that bitcoin is the “positive antidote” to everything that is “wrong and risky” about the world. For example, bitcoin could be a store of value during times of surging inflation and a life-saving technology for holders to escape war zones, he said.
To be sure, bitcoin has not performed like an inflation-hedging asset at a time when US inflation soared to a 40-year high. The price of the largest cryptocurrency has fallen to $39,000 from its all-time high of nearly $69,000 in November.
“I’m extremely bullish on bitcoin. It is suffering in the short term due to the risk-off market environment, which is the price we pay for it to become a more institutional asset,” he said. “But there are still two big drivers, one is that bitcoin adoption is still in the early days, the other is that bitcoin’s protective nature against inflation makes it a better store of value than many other things.”