The typical fund consists of deploying capital into certain sectors or industries, but venture capital firm OP Crypto is taking their own twist on the term.
OP Crypto is raising $100 million for its new investment, dubbed “Fund of Funds”, to deploy capital into emerging fund managers focused on early-stage crypto investments. A fund, for your fund, if you will.
“It’s an underlying diversifying vehicle for investors looking to get actively involved in crypto,” David Gan, founder and general partner at OP Crypto, told TechCrunch. “But also it’s a very good vehicle for strategic investors looking to really increase their deal flow across international borders and amongst people with niche vertical expertise.”
OP’s fund will be focussing on supporting fund managers from certain sub sectors like infrastructure, decentralized finance, NFTs, metaverse, gaming and those with a “geographical advantage” in Latin America, Africa, India and Southeast Asia, among other elements.
Despite the current choppy and bearish market sentiment, the firm has received $50 million in commitments from both traditional and crypto-focused LPs, including LedgerPrime and FJ Labs, with a target and hard cap of $100 million.
Lucas He, OP Crypto’s COO and head of research, will be the general partner to the fund. Both He and Gan previously worked at Huobi, where they seeded the first funds of managers like Multicoin Capital, Dragonfly Capital and 1kx.
“Combining my experience with [Gan’s], we really have a spectrum of CeFi, TradFi and DeFi experiences that give a great understanding of institutional money and their demands in the space,” He said.
A few months ago, the firm raised $50 million for its flagship venture vehicle, OP Ventures Fund, which is backed by Alan Howard and Bill Ackman alongside crypto-native institutions like Animoca Brands, Digital Currency Group and Galaxy Digital.
“Ultimately we’re at a state where a lot of institutional investors don’t know where to park their money and this safe haven-like vehicle allows people to come in,” Gan said. “We’re only looking for emerging managers investing in venture so it’s a longer-term horizon and they know that throughout a longer time span this is a really good sector to deploy heavily into venture with more reasonable valuations.”
The firm plans to deploy the new fund over a number of years, Gan said. “We want to have an even spread of exposure in bull and bear markets, so there’s good investments throughout both cycles.”
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