German investment firm Lennerz & Company aims to raise $165 million as its third crypto-focused entity, becoming one of the largest funds of funds active in the blockchain space. It is expected that there will be two. In an interview with luck, Oksana Tiet, head of fund investments at Lennarts, said the fund had already reached its first close, but declined to provide figures.
Lennertz, a multifamily office founded in 2015, invests in a variety of asset classes, including private equity and traditional venture capital. The company started betting on the blockchain space around 2016, investing privately in one fund before launching a $35 million fund of funds in 2020 and a second $65 million fund of funds in 2022. Launched a fund.
As a fund of funds, Lennertz does not invest directly in portfolio companies or token trading, but rather in other companies, including well-known crypto VCs such as Multicoin, Polychain, and Hack VC. The second fund focused on generalist funds that employ cryptocurrency strategies, including Bain Capital, Lightspeed, and Andreessen Horowitz.
Tiet said Lennarts decided to raise a new fund in part because of the performance of its crypto holdings compared to other investments. “We're seeing actual distributions from these funds, and when markets are as tight as they are right now, everyone from private equity to venture is suffering from a lack of distributions,” she said. said. “Blockchain is actually sitting very comfortably.”
investment strategy
The past few years have been a roller coaster for the crypto industry, with the 2021 bull market giving way to the FTX collapse in late 2022, followed by a gradual recovery with the approval of a Bitcoin ETF in early 2024. Ta. Major assets are largely stagnant, and appetite for new token launches and consumer projects is low.
Tiet said Lennarts' strategy of investing in other funds rather than investing directly in companies or tokens has helped it avoid the pitfalls of recent volatility. He expressed optimism that funds are starting to look beyond infrastructure and middleware projects, and that there will be more adoption, especially at the B2B level. “Anything related to DeFi, not to mention interesting topics.” [decentralized finance] And it’s all about the combination of blockchain and AI,” Tiet said. luck. “So the question is: do you want to distribute your data or centralize your data?”
With his third fund of funds, Lennarts plans to invest in eight to 10 blockchain-focused venture capital funds, some in Europe but mostly in the U.S., Tiedt said. said Lennertz had raised enough money to invest in two funds: Polychain and Bain Capital. crypto fund.
While some traditional investors have distanced themselves from radioactive sectors that deal with constant price fluctuations and a constant onslaught of regulatory issues, Mr. Tiet said Mr. Lennarts' foundation About 40 families, most of whom she described as entrepreneurs, said they supported the investment thesis. The first two funds both posted an annualized internal rate of return of 35%, so the returns probably aren't bad.
Tiet said blockchain accounts for about 10% to 12% of the company's overall investments.
Lennarts is not the only crypto fund raising new capital. In September, luck Accolade, a US-based fund of funds, has raised $135 million for two vehicles and will likely continue selling them, the company reported. Hack VC, one of Lennarts' portfolio funds, also raised $77 million.
The crypto sector may still be far from its 2021 peak, but dry powder is starting to accumulate on the sidelines.
