It has emerged that one of the planet’s most respected endowment managers has taken up positions in the cryptocurrency space. David Swensen has managed Yale University’s almost $30 billion endowment fund since the mid-eighties, earning him great esteem as an investor.
Yale’s “Warren Buffett” Investing in Cryptocurrency
More institutional money continues to trickle into cryptocurrency. This time, it’s courtesy of Yale University’s endowments fund. David Swensen, the institution’s endowments manager, has been reportedly taking up positions in a couple of funds dedicated to digital assets.
The news comes courtesy of CNBC, who, as usual, cite only “people familiar with the matter”. The first fund linked to Swensen is Andressen Horotwitz’s $300 million digital assets fund.
According to a blog post about the fund, it is focused on “long-term, patient” investments in crypto. The fund will be taking up positions in up-and-coming startups and platforms with solid use cases, as well as established digital assets such as Bitcoin and Ether.
The second investment Swensen has been linked to in the space is Paradigm – a new fund focused on blockchain technology firms, as well as cryptocurrencies. Paradigm was set up by Fred Ehrsam and Matt Huang, of Coinbase and Sequoia Capital respectively.
In a career spanning four decades, Swensen has managed to build himself quite the reputation as Yale’s primary money manager. He is considered to be one of the top investors on the planet.
According to the report in CNBC, he is that influential that his strategy has been outlined in several books. This, in turn, has helped shape the way endowments are managed around the world. Whilst in his position at Yale, Swensen managed to turn a $1 billion endowment fund into a massive $29.4 billion. Such a performance earned him a reputation as Yale’s “in-house Warren Buffett.”
People connected with the cryptocurrency space are quietly confident that Swensen’s moves into the market could be something of a watershed moment in terms of institutional investments in digital assets. Bill Barhydt, CEO of Abra, an exchange platform, spoke about the potential significance of the development:
“People are excited about it, but afraid of being the first, or having to explain themselves… That’s the fear vs. greed of institutional investing. There’s a herd mentality there as much as there is in retail investing.”
The precise figure that Swensen has allocated to each of the funds chosen is unclear at present. However, if Barhydt’s inkling holds true, we could be about to see many more influential institutions taking up similar positions in the coming weeks and months.
Featured image from Shuttestock.