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Crypto Hedge Fund Ikigai Tests Venture Capital Waters: Sources


blockworks.co 21 January 2022 22:08, UTC
Reading time: ~2 m

Crypto hedge fund firm Ikigai Asset Management is launching its first venture capital fund on the back of strong investor demand, according to two sources familiar with the matter.

The firm had previously been taking private blockchain stakes in its flagship Ikigai Opportunities Master Fund via side pockets, or seperate accounts for illiquid assets. Ikigai, run by founder and chief investment officer Travis Kling, initially set out to raise $20 to $30 million for its inaugural venture capital fund. 

Investor demand, however — Ikigai marketed the fund exclusively to existing limited-partners — led the firm to cap the oversubscribed fund at $40 million. The vehicle would likely launch sometime this quarter. 

Sources were granted anonymity to discuss sensitive business dealings. Kling declined to comment. 

“Outstanding” track record

Kling has hit on a number of past private investments via Ikigai’s flagship fund, with one family-office investor calling his track record on such plays “outstanding.” 

The firm has been investing in venture assets since at least 2019, when Ikigai contributed to a $3.2-million raise for Digital Assets Data. 

Valuations for private digital assets deals have been soaring recently, but many industry participants don’t expect much of a downturn.

“We keep seeing more and more money coming in, and valuations growing, and rounds becoming higher and higher,” said one crypto hedge fund manager who asked not to be named. 

Ikigai’s limited-partners include asset managers and funds-of-funds. Its overall assets under management aren’t publicly available. 

In an annual review letter, Kling called 2021 a “spectacular” year for crypto. Huge gains were driven in part, though, “by exceedingly accommodative monetary and fiscal policies,” according to Kling — who added that’s set to change this year. 

“The future couldn’t be brighter. But it’s also still highly uncertain,” he wrote. 

“It is far from set in stone whether this technology and asset class will deliver on all of, some of, or none of its potential to make the world a better place,” Kling said.

Prior to co-founding Ikigai, Kling worked as a portfolio manager for Point72 Asset Management. Before that, he spent time at the energy-focused asset manager Magnetar Capital. 

Ikigai’s chief executive officer is Anthony Emtman, who previously worked for video-focused company Jogg.

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