- The launch’s anchor family office already invests in Web3 startups.
- The fund is one of a growing number of new NFT-focused vehicles that have emerged as institutional investors seek exposure to the sector.
With hedge and private equity setups competing for limited-partner lockup periods, liquidity is an issue with digital collectible funds. According to two people familiar with the situation, a fine art collector is laying the groundwork for an NFT fund for institutional investors with the help of Accretion Capital, a Miami family office.
According to the sources, who founded Accretion in 2013, intends to launch the vehicle in the second quarter. The fund intends to invest in short-term plays such as purchasing new NFT (non-fungible token) mints and related tokenomics projects, as well as a medium-term strategy that emphasizes trades based on market inefficiencies.
To discuss sensitive business dealings, sources were granted anonymity. Burillo did not respond.
Accretion is primarily interested in venture capital investments ranging from pre-seed to Series B rounds. The new fund has been established as a separate entity from the family office. However, an unnamed number of investment partners are also working on the launch.
The Accretion NFT Fund is also planning to engage in longer-term strategies, such as buying and holding blue-chip NFTs like Bored Ape Yacht Club collectibles and CryptoPunks.
The fundraise comes at a time when a growing number of crypto asset managers are responding to growing institutional investor interest in digital collectibles with funds dedicated to this niche of crypto. One issue is liquidity, with some portfolio managers preferring a private-equity-style lockup period similar to traditional fine art funds and others using a hedge fund setup.
“In theory, you need valuation metrics to do it as a hedge fund,” one source said. “However, if you think of it as art, you should put it in a private equity fund.”
“Right now, there are a lot of opportunities to make money in this.” Pricing is all over the place, and few traders understand what they’re doing.”
Burillo is launching a new founder’s share class with preferential fees and a lockup period. According to one source, after it expires, limited partners will be able to redeem on a quarterly basis. It’s unclear how much money he’s raising in total.
Anonymous NFT traders with proven track records are also attracting attention. Punk6529, a well-known crypto Twitter user, is launching an NFT-focused hedge fund.
Accretion also makes its own investments in blockchain companies, including stakes in promising Web3 startups.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.