German investment firm Lennertz & Co. is setting its sights on raising $165 million for its third blockchain-focused fund, positioning itself as a key player in the crypto investment landscape.
A Proven Track Record in Blockchain
Founded in 2015, Lennertz has built a reputation for investing across various asset classes, including private equity and traditional venture capital. The firm started exploring blockchain investments around 2016, launching a $35 million fund of funds in 2020, followed by a $65 million fund in 2022.
Oksana Tiedt, head of fund investments at Lennertz, confirmed that the new fund has already had its first close, although specific figures were not disclosed.
Investing in Other Funds
As a fund of funds, Lennertz doesn’t invest directly in crypto companies or tokens. Instead, it backs other investment firms, including notable crypto venture capitalists like Multicoin, Polychain, and Hack VC. Their previous funds focused on generalist funds that incorporate crypto strategies from big names like Bain Capital and Andreessen Horowitz.
Tiedt noted that the strong performance of their crypto holdings has prompted the firm to launch this new fund. “In a tight market, blockchain investments are performing well, with real distributions coming in,” she explained.
Navigating Market Volatility
The crypto market has experienced significant ups and downs in recent years, from the 2021 bull run to the collapse of FTX in late 2022. Despite these fluctuations, Lennertz’s strategy of investing in other funds has helped it navigate the volatility more effectively. Tiedt remains optimistic about the future, highlighting interest in areas like decentralized finance (DeFi) and the intersection of blockchain and artificial intelligence.
With the new fund, Lennertz plans to invest in eight to ten blockchain-focused venture capital funds, primarily in the U.S., while also considering some in Europe. Tiedt mentioned that they have already raised enough capital to invest in two funds, including Polychain and Bain Capital’s crypto fund.
Strong Support from Family Investors
Despite the ongoing challenges in the crypto sector, which include regulatory hurdles and price swings, Lennertz has a solid base of around 40 families—primarily entrepreneurs—who support its investment strategy. The firm’s earlier funds have delivered impressive returns, averaging over 35% per year.
Currently, blockchain investments make up about 10-12% of Lennertz’s overall portfolio. The firm is not alone in raising new capital; other crypto funds are also attracting investment, indicating that while the sector is not at its peak, interest is starting to pick up again.
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