(Bloomberg) -- ParaFi Capital, a New York-based digital asset manager that includes KKR & Co. co-founder Henry Kravis among its backers, raised $120 million from investors including Theta Capital Management and Accolade Partners.
In a new strategy for ParaFi, the funding will be partly used to acquire general-partner stakes in other crypto funds that are focused on specific market segments, strategies or geographies. The firm plans to build a portfolio of 30 to 50 such stakes in the next three to five years, Ben Forman, founder of ParaFi, said in an interview.
ParaFi has already backed nine different crypto managers out of its own balance sheet in recent years. Now it’s expanding the strategy to outside investors just as the number of crypto funds has begun to grow again.
“GP stakes are a growing asset class in traditional finance, but haven’t existed at scale in crypto,” Forman said. “We think they will. We’ve watched the crypto-fund landscape evolve closely over the years. We believe there will be many more crypto funds as institutional capital enters this space. It’s important to have specialization and focus, whether it’s across geography, theme or type of investment.”
Crypto funds have been raising money this year as digital-asset prices continued to recover from a series of bankruptcies and scandals that culminated in a market crash in 2022.
ParaFi is one of the better known and largest crypto funds. Around for about six years, it runs hedge fund and venture-capital strategies, and has a 22-person team. In addition to KKR and Kravis, investors include Bain Capital Ventures. Forman previously worked for KKR.
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