Yale University Investing in Paradigm Crypto Fund
Yale University, which is known to have invested in a range of assets such as Puerto Rican bonds to New Hampshire timber, is now entering the cryptocurrency market. According to an anonymous source, the Ivy League school is one of investors that has helped a major new crypto fund raise $400 million.
The crypto fund, called Paradigm, has been created by the co-founder of Coinbase Fred Ehrsam, the ex-partner of Sequoia Capital, Matt Huang and the former executive of another crypto fund Pantera Capital, Charles Noyes.
Yale’s Endorsement of Paradigm
Institutional investments would help get the cryptocurrency market out of its current slump. Unfortunately, the lack of regulations and reports of market manipulation have been scaring away institutional investors. In fact, according to a survey conducted by the consulting firm NEPC, 96% of the foundations and endowments who responded stated that they would not invest in the crypto market.
Yale, which has the second largest endowment among educational institutions, is among the few big institutions to be entering the crypto market. The school’s endowment fund is $30 billion and is headed by David Swensen. However, it is unknown how much the school has invested in Paradigm.
The fact that Swensen has invested Yale’s money in Paradigm is very significant, since the head of the Ivy League school’s endowment is considered to be one of the pioneers in institutional investing.
In fact, he has been so successful in managing the school’s endowment that many other institutions have tried to replicate his investment model. The model Swensen has used over the last three decades in Yale has favored the longer time horizon, as well as investing in more illiquid assets, including private equity. Using Swensen’s model, Yale has been returning an average of 11.8% per annum for the last 20 years.
Yale has also been investing in hedge fund Andreessen Horowitz, which has now launched its own $300 million crypto fund. According to sources, Yale has also invested in that crypto fund.
Paradigm’s Investment Plans
Paradigm is planning to use the $400 million it has raised to invest in early-stage crypto based projects, new Blockchain projects as well as cryptocurrency exchanges. This information had been communicated by Noyes in June, however, at this time, the new firm has not commented on the veracity of these plans.
Over and above investing directly in the cryptocurrency market, a number of crypto funds invest in other crypto funds and also buy stakes in new Blockchain companies.