Pantera Capital's early-stage token fund is down 71% this year: Exclusive

QUICK TAKE

• Crypto investment firm Pantera Capital’s early-stage token fund is down 71% year-to-date as of September, according to an investor presentation obtained by The Block.
• The fund, which invests in tokens with liquidity horizons between one to three years, has still returned 372% since inception, according to the document.

Investment firm Pantera Capital's early-stage token fund has lost nearly three-quarters of its value this year amid a bloodbath in crypto markets. 

The fund is down 71% through the end of September, according to an investor presentation obtained by The Block. It charges a 3% management fee with a 30% performance fee. Pantera didn't provide a comment when approached by The Block.

Pantera is one of the oldest investment firms in the crypto industry, having been founded in 2013. The early-stage token fund launched in 2017 with a strategy that provides investors exposure to tokens with liquidity horizons of one to three years, according to the document.

The news comes at a time when the majority of tokens and cryptocurrencies are down by 50% or more in the wake of a tricky macro environment with interest rates rising and surging inflation.

Pantera isn't the only crypto fund experiencing a hit in this downturn. The Wall Street Journal recently reported that Andreessen Horowitz's flagship crypto fund fell by 40% in the first half of the year. The Journal said this decline is much larger than 10% to 20% drops reported by other venture firms.

Andreessen Horowitz (a16z) is one of the largest players in crypto investing having raised a total of $7.6 billion to deploy into crypto and web3 startups.

Pantera's CEO Dan Morehead is known for his strong views on the macroeconomic environment, which he explores in monthly investment letters.

"I think we can decouple from the other risk assets and we will see a world, a year or two from now, where a lot of interest-rate-sensitive assets are lower than they are today and blockchain is much, much higher," said Morehead in his October letter.

Pantera's bullish long-term view

Even though Pantera's token fund is in tough spot this year, it has still returned 372% to investors since its inception, according to the document. The fund had an even tougher year in 2018, when it fell 83% — before rebounding 562% in 2020 and 319% in 2021.

The fund is co-managed by Morehead, Pantera's co-chief investment officer Joey Krug and Paul Veradittakit, a partner at Pantera. 

The firm currently oversees $4.5 billion in assets and runs three different fund strategies: the early-stage token strategy, a blockchain fund that is a venture fund that invests in equity and a liquid token strategy. The firm is also seeking to raise $1.25 billion for a second blockchain fund, according to a report from Bloomberg.

The first blockchain fund launched back in 2021 and targeted a $600 million raise. Earlier this year, Pantera announced it had secured more than $1 billion in commitments for the fund.

At the time, Morehead told Bloomberg he was planning to close the second blockchain fund in May and was also looking to capitalize on the downturn by buying additional shares in existing portfolio companies. 

Pantera’s portfolio includes companies like Anchorage Digital, Amber Group, Coinbase, Flashbots and FTX.