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(Kitco News) – Crypto asset manager Pantera Capital, which manages $ 5 billion in assets, is launching a new blockchain fund for institutional and private investors.
Pantera CEO Dan Morehead, an alum from Tiger Management, announced the new fund in a call for investors today. The company plans to raise $ 600 million for its new blockchain fund, which will increase its total AUM by 12%. The company completed the first closing of the new fund back in June, at which point it raised $ 375 million. They plan to have closings after every fiscal quarter by March 2022 to give investors the opportunity to get into the new blockchain fund.
Pantera’s blockchain fund will invest in three categories: 40-50% in venture equity, 30-40% in early-stage tokens, and the rest are traded liquidity tokens like Bitcoin and Ethereum, albeit not limited to these cryptocurrencies. Pantera already operates separate individual funds for these strategies. The new blockchain fund will take a hybrid approach to all three strategies.
The venture component includes companies developing products and services in the blockchain ecosystem for infrastructure, tools, payments, and more. Pantera will invest in Seed, Series A and some growth rounds, and will write checks between $ 1 million and $ 15 million.
For the early-stage token strategy, Pantera plans to buy them at a price lower than what those assets will be trading at when they are launched. The team will focus on tokens associated with the decentralized finance area (Defi) that Pantera Capital Co-CIO Joey Krug describes as “low hanging fruit in this area right now”. Pantera has a good track record. After getting early on the Defi-Protocol Polkadot with a $ 5 million investment, they saw the value of this asset increase 70x.
Pantera will take an active management approach with digital assets already traded in the market.
In the call, Morehead stated that the fund would “use pendulum value fluctuations between token and venture”, which Pantera had already done in the last seven or eight years through its other fund strategies.
While cryptocurrency prices can be extremely volatile, the company is on the other side of the spectrum and moving very slowly. Pantera’s plan is to buy up liquidity tokens when they are cheap. When they get expensive compared to other early-stage tokens, they are sold at a premium and invested in less liquid assets.
Pantera has an optimistic view of the blockchain space for an investment horizon of five to ten years and has no plans to go after every sell-off in the market like today’s, which dropped Bitcoin price by about 10% to below $ 50,000 , to risk.
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