Spartan Group, buoyed by institutional interest, closes a $110 million DeFi fund

Investment and advisory firm Spartan Group has begun deploying capital for a newly raised $110 million fund, according to Jason Choi, a general partner at the company. 

The new fund — which originally targeted $30 million — will focus on the market for decentralized finance (DeFi), with a specific focus on the application layer. The fund's mandate is blockchain-agnostic and will back projects across Ethereum, Solana, and other networks. 

The fundraise reflects the growing interest among professional investors in the DeFi market, which aims to replace traditional financial services like lending and trading with decentralized alternatives. The firm declined to share the exact names of its limited partners but said that they are high-net-worth investors and family offices that have recently entered the market. 

"These are traditional folks, family offices who have kind of seen the light," Choi said in an interview.

The firm has already deployed capital into projects via a smaller proprietary fund rolled into the newly launched fund. The firm has backed dYdX and Arbitrum, among other projects. It plans to invest in about 50 projects over the five-year lifetime of the fund. 

Despite the slump in prices across the market, Choi said interest among investors out of Asia in private deals is holding up. 

"Most investors were Asia-based but have U.S. and Europe [funds of funds] too," he said. "I think Asia retails care a lot about price but institutions generally adopt a longer time horizon view so was easier to raise for venture than [a] hedge fund."

Elsewhere, Framework Ventures — another fund-operator in the DeFi space – announced a $100 million fund with backing from Hall Capital Partners.

"The resounding sense that I get is that people are underestimating the amount of capital that's coming off the sidelines by probably 1 to 2 orders of magnitude," Framework's Vance Spencer commented on a recent episode of The Scoop.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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