(Kitco News) – Crypto asset manager Pantera Capital, which oversees $5 billion in assets, is launching a new blockchain fund for institutional and retail investors.
Pantera CEO Dan Morehead, a Tiger Management alum, announced the new fund on an investor call today. The firm plans to raise $600 million for its new blockchain fund, which will bolster its total AUM by 12%. The firm already completed its first closing on the new fund in June, at which time it amassed $375 million. They plan to have closings after every fiscal quarter through March 2022 to give investors a chance to get in the new blockchain fund.
Investment Strategy
Pantera’s blockchain fund will invest across three categories: 40-50% in venture equity, 30-40% in early-stage tokens, and the rest is traded liquidity tokens such as Bitcoin and Ethereum, though not limited to those cryptocurrencies. Pantera already runs separate individual funds across these strategies. The new blockchain fund will take a hybrid approach across all three strategies.
The venture component comprises companies that are building products and services in the blockchain ecosystem across infrastructure, tools, payments and more. Pantera will be investing across seed, Series A and some growth rounds and will be writing checks between $1 million and $15 million.
For the early-stage token strategy, Pantera plans to buy them at a price below where these assets will be trading when they launch in the market. The team will focus on tokens tied to the decentralized finance (Defi) space, which Pantera Capital co-CIO Joey Krug described as “low hanging fruit in this space right now.” Pantera has a good track record. After getting in on Defi protocol Polkadot early with a $5 million investment, they have seen that asset balloon 70-times in value.
Pantera will use an active management approach with digital assets already trading in the market.
Morehead explained on the call that the fund will “take advantage of pendulum swings in value between tokens and venture,” which Pantera has been doing for the past seven or eight years anyway through its other fund strategies.
While cryptocurrency prices can be extremely volatile, the venture is on the other side of the spectrum and is very slow-moving. Pantera’s plan is to buy up liquidity tokens when they are cheap. When they become pricey relative to other early-stage tokens, they will sell at a premium and invest in less liquid assets.
Pantera has a bullish view on the blockchain space for a five-10-year investment horizon and has no plans to derisk after every market sell-off, such as today’s that sent the bitcoin price tumbling roughly 10% to below $50,000.
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