Morgan Creek, a Wall Street Hedge Fund to Raise $500 Million for Blockchain Ventures
Originally published on: Morgan Creek, a Wall Street Hedge Fund to Raise $500 Million for Blockchain Ventures
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March 28, 2018
Raleigh, North Carolina-based venture firm Full Tilt Capital LLC announced in January 2018 that it was entering the crypto market all guns blazing and its next fund will be entirely dedicated to world-class blockchain and crypto asset ventures. Before this call, Full Tilt focused primarily on seed-round investment.
However, now it turns out that Full Tilt is not going solo in the new venture. The firm has been acquired by Morgan Creek, a hedge fund with assets worth more than $1 billion under management.
Neither company has so far shed light on the specifics of the deal.
A Strategic Push into Blockchain and the Crypto Market
Apparently, the acquisition is a direct result of Morgan Creek’s growing emphasis on embracing blockchain technology which, according to the company, is one of the most promising innovations in the digital age.Mark Yusko, founder and chief investment officer at Morgan Creek, said :
“Morgan Creek believes blockchain to be one of the most powerful and valuable technologies to have been developed in the digital age and also believes that the disruptive power of the application of blockchain technology across all asset classes will create enormous investment opportunities,”
He added: “To fully capitalize on this compelling opportunity, Morgan Creek has acquired Full Tilt Capital.”
Yusko’s enthusiasm about the crypto market and blockchain technology was already well known considering that the stock market bear had earlier predicted that bitcoin price could reach as high as over $1 million.
The acquisition is expected to be followed up with North Carolina-based Morgan Creek raising somewhere around $500 million in a new fund meant just for future investments in the blockchain. The firm is optimistic that not only will this new venture be popular among high-net-worth investors, but it will also attract others including pension funds, foundations, and endowments, among others.
If Morgan Creek manages to meet the $500 million target, which it most likely will, the worth of new fund will account for around 25 percent of the asset under its management.
Turning Equity into Tokens
The new fund already has a well-defined strategy which will see Morgan Creek, with the help of Full Tilt’s resources, focusing on transactions carried out using blockchain technology. Anthony Pompliano, a managing partner at Full Tilt, has revealed that the fund is currently planning on converting the equity of a New York City-based hotel into tokens for sale. He, however, refused to divulge the identity of the hotel or its owners.
Earlier, Kevin O’Leary, the famous “Shark Tank” investor said he was working on a first-of-its-kind deal that could see a “very prestigious brand hotel” in New York, selling its ownership in a $400 million asset-backed cryptocurrency offering.
Additionally, the combined team of Morgan Creek and Full Tilt is considering turning the equity or debt in a company into crypto tokens.
Pompliano, who is still with Full Hilt post-acquisition, said: “We’re encouraged by the potential blockchain can bring to financial markets. [….] Although this is new, we’re excited to be at the forefront.”
It is worth mentioning here that the decentralized ledger approach at the heart of blockchain technology has captured the collective imagination of Wall Street as it could drastically reduce expenses while expediting the trade clearing and settlement processes. So it is likely that we will get to see more and more entities going all-in on crypto soon.