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Known for investing in various companies, Yale University has finally set foot in the cryptocurrency market by investing in a fund which focuses on digital assets. The Ivy League school, along with other investors managed to raise $400 million for the fund, which has been started by Fred Ehrsam of Coinbase, Matt Huang of Sequoia Capital, and Charles Noyes, a former employee at Pantera Capital.
Called Paradigm, the $30 billion Yale endowment is headed by David Swensen along with a few other institutions that have chosen to invest in cryptocurrency market. The total amount is unknown at the time of publication, and the school doesn’t seem keen on clearing the air around this.
Institutional capital is touted to be a game-changer in the cryptocurrency ecosystem. 96 percent of endowments and foundations that responded to a survey by consulting firm NEPC in February said they don’t invest in digital currencies.
Swensen’s investment holds great value and is one of the most-watched and best-performing college endowments. His investment model has been replicated by other endowments, focusing on a longer time horizon and committing capital to more illiquid assets.
Paradigm is backed by Sequoia Capital and aims at investing in crypto projects, blockchains, and exchanges, according to sources. At the time of writing, the venture’s internal functioning remains unknown.
Yale’s Cryptocurrency Push
Yale’s endowments are second only to Harvard University, with the former handling over $550 billion in investments. Swensen’s masterful investment strategy leads to returns of an average 11.8 percent annually, equating to a mammoth $6 billion in profits. From the total amount, 60 percent of the college’s endowment is set aside for investing venture capitals, hedge funds, and technology infrastructure.
Yale’s newest investment is not the first endowment exposed to cryptocurrency. The university has invested in funds managed by noted venture capital for Andreessen Horowitz, which recently launched a $300 million crypto-focused investment fund which featured Yale, according to CNBC.
Crypto funds have continued to increase despite the recent market shake-up. As of September 1, CNBC reports that there are 389 global crypto funds – substantially more than just 23 such funds in 2016.