Yale’s ‘Warren Buffett’ Invests in New Crypto Fund
US investor David Swensen, who manages Yale University's $30 billion endowment, is now betting on the crypto market by investing in a cryptocurrency-oriented fund that raised $400 million, people familiar with the matter told CNBC and Bloomberg. Paradigm, as the new fund is called, was launched by Fred Ehrsam, who co-founded crypto exchange Coinbase, Matt Huang, former partner at venture capital firm Sequoia Capital, and Charles Noyes, who worked at Pantera Capital. The sources didn't specify how much Yale contributed.
David Swensen is often nicknamed Yale's Warren Buffett due to his success and experience in investing. Paradigm is not his first investment with the university's fund. The chief investment officer of Yale's endowment backed in June the $300 million crypto fund launched by reputable VC firm Andreessen Horowitz.
Representatives from Yale's endowment, Paradigm, and Andreessen Horowitz didn't want to comment.
Swensen's move is significant for the crypto market given his reputation in institutional investing. He has managed Yale's fund, which is one of the best-performing university endowments, for about 30 years. During his management, Yale has recorded an average return of 11.8% per year during the past two decades. Swensen tends to be oriented to long-term investments and goes for less liquid assets, such as private equity.
Interestingly, the crypto market hasn't been much influenced by the news. However, the key point is that institutional investors might be encouraged by Yale's fund, though some of them are still concerned about the lack of regulation and increased market manipulation. In February, an NEPC survey found that 96% of endowments and foundations stated that they didn't have plans to invest in cryptocurrencies.
Paradigm is a crypto-oriented fund that has been formed recently but hasn't announced its existence yet. According to Charles Noyes, who spoke with Bloomberg in June of this year, the firm is backed by VC firm Sequoia Capital and intends to invest in blockchain and cryptocurrency projects.