About 90% of the funds will go into core portfolios of between 20 to 25 positions.
BlockTower, an asset management firm, is reportedly launching a venture arm and a new $150 million fund. According to Thomas Klocanas, BlockTower’s general partner, the fund has been operating on the blind side of the public since December 2021. Within a space of two to three weeks, most of the capital was locked up by the firm. It is important to note that Klocanas is in charge of the new venture of the firm. He was a key figure in managing a $50 million digital asset fund at White Star Capital.
The fund has some limited partners including “Mutual, VanEck Equities, BPI France, Circle, and the Teacher Retirement System of Texas.”
According to Klocanas, BlockTower has been releasing capital methodically, and its investment in startups including Aptos, Lighthouse Labs, and Maple Finance came out from the new funds. The Investment focuses on decentralized finance and crypto infrastructure companies.
“We are currently on pace to deploy in something like three years – whereas as you’ve seen funds go as fast as a couple of months in this space – and that’s because we found the market to be overheated,” said Klocanas.
As part of his plans, about 90% of the funds will go into core portfolios of between 20 to 25 positions. It is also considering ownership of between 5% to 10% on the equity side, and 2% to 5% on the token side.
Klocanas explained the reason for the numbers.
“Why these numbers? They’re numbers that scale from a portfolio math perspective for your winners to be able to return your losers in a venture portfolio, so to speak. But they’re also numbers that scale on a web3 cap table,” he said.
It is also reported that the fund takes advantage of a Registered Investment Advisor (RIA) structure. This is a huge competitive advantage. Klocanas disclose that they can back some deals because they are the best rather than because of the “instrument they are constrained to raising capital with.”
The three other strategies operated by BlockTower are a long-biased flagship fund, credit strategies with the likes of MakerDAO and Centrifuge, and a market-neutral fund that pays attention to arbitrage and basis trades.
Klocanas believes that the company has the execution capacity to crystallize returns as close to “the price on the screen.”
Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
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