Other industry highlights:

• Former Shima Capital Investors Secure (Notable) Anchor for $80M Infra, Privacy and AI Fund

• Split Capital Crosses $20M in AUM and Adds Trader to Team

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^{🗞 Allocator Developments 🗞}

Emerging Multi-Manager / Multi-Strategy Fund Appoints Former CoinFund Partner as Managing Partner – Jon Campagna announced on LinkedIn his recent move to Nexyst Digital, a a quantitative multi-strategy firm with a focus on alpha generation in liquid digital assets. The firm is actively looking to work with quant crypto traders.

Raoul Pal’s Crypto Fund Tops HSBC HF FoF List, while Bitwise’s $25M Alpha Fund Boasts Respectable Performance — The beta biased FoF founded by crypto KOL and former Goldman Sachs banker, Raoul Pal, returned 107.9% in 2023 placing them at the top of HSBC’s HF FoF list. Meanwhile, the $25M Bitwise Multi-Strategy Alpha Fund, a crypto quant FoF managed by former Morgan Stanley exotic derivatives trader Jeff Park, returned 18.8% in 2023 outperforming the VisionTrack Market Neutral Index by 0.89%, but underperforming the VisionTrack Quantitative Index by 37.6%.

Bull Market Sparks +$12M of Allocator Inflows into Crypto FoFs — Pattern Ventures, a FoF allocating to VCs between $5M-$50M AUM, attracts $11M worth of inflows, while Arena Digital, liquid multi-strategy FoF sees $1.15M of inflows bringing total amount raised since inception to $14.78M.

Theta Capital Launches Fourth Crypto VC FoF – The Netherlands-based fund announced an initial raise for the fourth iteration of its Blockchain Ventures fund of funds, aiming for $200M in commitments. Currently, the firm has $650M in AUM across all funds.

Multi-Family Sees Crypto Interest Pickup – Arthur Salzar CEO of the multi-family office Northland Wealth Management, says clients hold as much as 20% of their portfolio in Bitcoin for alpha generation, hedging currency debasement and as a store of wealth.

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🔥 What’s Hot in Crypto 🔥

Hivemind Launches $50M Art Fund and Leaks Alpha Behind Strategy to CFW

Hivemind Capital, a New York based firm, with a portfolio that includes cultural/infrastructural crossovers like Limewire, Napster and TRLab, has announced the formation of their Digital Culture Fund, launched out of the UK, which has and will continue to acquire high-signal pieces of digital art.

With NFT volumes having cratered since 2021, Hivemind founding and managing partner Matt Zhang sees nowhere to go but up. “Amidst signs of what we believe is a cyclical resurgence in the market, we're thrilled to be providing this new investment product at this pivotal moment.”

Richard Skeet, Managing Partner and Head of Research, and Charles Mountain, Senior Research Principal of the Digital Culture Fund, tells CFW they are taking a unique approach to portfolio construction.

The fund aims to build a portfolio of 5-10 core collections with unique one-of-one’s to enhance each collection. In total, the portfolio is expected to own more than one hundred NFTs

With regards to selecting which collections and pieces the fund includes in their portfolio, the fund utilizes a hybrid approach. For more liquid collections, like CryptoPunks, the fund has developed a pricing model to analyze which pieces maybe over or undervalued compared to the rest of the collection. However, for more less liquid and more abstract collections, the fund utilizes a more fundamental approach. I.e. analyzing the history of the artist or community, unique traits of a piece, etc.

To that end, per Bloomberg, the fund has already acquired a slate of established works from Starry Night Capital, the art fund which was forced to liquidate its holdings following FTX’s implosion, including a Crypto Punk and Fidenza, the high-value collection of generative artist Tyler Hobbs.

The fund plans to raise another $25M throughout the remainder of the year to reach its $50M target.

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Former Shima Capital Investors Secure (Notable) Anchor for $80M Infra, Privacy and AI Fund

Alex Lin and his partner Carl Hua announced their recent departure from Shima Capital, a $200M early-stage blockchain VC fund, in order to launch Reforge. The pair have already secured one of the world's leading blockchain financial institutions as an anchor investor (Reforge prefers to keep the name undisclosed) and are hard-capping at $80M for Fund I.

The firm will focus on investments in blockchain infrastructure, privacy-enhancing tech, and symbiosis of AI and distributed compute at the earliest stages (pre-seed and seed). Other investment criteria Reforge looks for when analyzing projects include: first movers, “growing the pie and not taking a slice” and founders looking to break the status quo.

The firm’s core value-add for portfolio companies is their technical expertise. Unlike most VC firms in crypto, the founding team of Reforge has both built and sold a Layer-1 blockchain. In other words, Reforge “speaks the same language” as founders, helping to guide them through the delicate balance of achieving market fit (technical and product advisory), while aligning token shareholder expectations (tokenomics). This also allows Reforge to operate with speed and conviction, positioning themselves in the best deals much faster than other investors.

Their current allocations call for 80% to crypto, 10% to privacy-enhancing technology, and 10% to AI security and safety, with a focus on infrastructure projects over consumer applications.

The firm aims to attract a wide range of funding sources, including corporations, family offices, FoFs and RIAs.

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Split Capital Crosses $20M in AUM and Adds Trader to Team

Zaheer Ebtikar and Michael Churchouse, along with Nai Boonkongkird, have some notable updates at their new firm Split Capital. Having secured 7 figures in capital at the start of the year, the Fund has recently crossed $20M in AUM. The firm also announced the hire of a new trader, Jack Ullery. Ullery has prior experience at Tensai Capital, a crypto native proprietary trading firm.

The team is currently scaling up, with plans to hire a fifth member for operations/IR, potentially as a COO. Ebitkar was most recently with LedgerPrime, a trading firm acquired by FTX/Alameda in 2022, which subsequently looped them into the historic implosion of the centralized exchange and its sister firm.

Ebtikar is looking to emulate LedgerPrime’s approach at Split Capital, combining quantitative analysis with discretionary decision-making, managing a long-biased book of undervalued tokens and leveraging their network within the crypto community for informational advantage.

The principal strategy is development and growth: “The overwhelming majority of the capital in crypto is venture money,” Ebtikar told Fortune. “We have this thesis that in the long run, we can’t just keep making new tokens and pumping those out and having those exist without crypto folding in on itself.”

Churchouse previously worked at Nickel Digital, where he was the first hire for their long-only DeFi fund, staying for over a year before transitioning to LedgerPrime shortly before the collapse of FTX.

Notable backers include Novi Loren, UTXO Management and Dan Matuszewski, Co-Founder of CMS Holdings.

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🍿 Blockchain Bytes 🍿

• 🔥 VC’s add Quant Trading Arms to Investment Offerings 🔥 — Borderless Capital, the $500M AUM Web3 investment firm acquires CTF Capital, a quant trading and asset management firm (TechCrunch), while Republic Capital, a $650M VC Fund, acquires GoldenChain, the crypto trading team previously a part of the $47B asset manager GoldenTree Asset Management (Matt Harrington)

• After FTX's acquisition, LedgerPrime revives as MNNC Group, targeting +40% returns (CoinGape)

• Famed quant, Cliff Asness, analyzes the impact of Bitcoin halving, admits that his $120B hedge fund, AQR, trades Bitcoin. (DL News)

• 1kx raises $75M for crypto-based consumer applications VC fund with funding from Marc Andreessen, Galaxy Digital, and Accolade Partners (Cointelegraph)

• 🔥 Largest Raise in 2024 From a Liquid Crypto HF 🔥 — Hunting Hill Digital’s Crypto 25 Offshore Fund, an actively managed strategy focused on the top 25 cryptos by market cap, liquidity and performance, raises $45.2M (Edgar)

• Binance Labs has spun off from its parent company to form an independent VC fund with $10B AUM (Forkast)

• “Striking While the Iron is Hot” — Hack VC looks to raise $100M for seed stage fund after completing a $150M raise in February and deploying a third of the fund (Bloomberg Law)

• Skycatcher, a fundamentals driven on-chain HF focused on public tokens with real business earnings, has delivered +70.72% CAGR since July 2022 (inception) and is currently raising additional $20M (Skycatcher)

• Former Abra bigwigs secure $2M in GP Funding to launch Blockhouse Digital, a crypto asset management firm specializing in lending and quant strategies (Yahoo Finance)

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