Lennertz Raises New Crypto Fund as Its Holdings Outperform Other Investments

A multi-family office established in 2015, Lennertz invests across different asset classes, including private equity and traditional venture capital.

Multi-family office Lennertz has closed on $40 million for its third fund of funds focused on blockchain, targeting $75 million in total, according to managing director Christina Tiedt.

Founded in 2015, Lennertz began investing in the blockchain space around 2016. The firm, which manages about $3 billion in total, has since launched a $35 million fund of funds in 2020 and a second $65 million fund in 2022.

As a fund of funds, rather than investing directly in portfolio companies or token deals, Lennertz invests in other firms, including well-known crypto VCs such as Multicoin, Polychain, and Hack VC. Its second fund focused on generalist funds with crypto strategies, including Bain Capital, Lightspeed, and Andreessen Horowitz.

Now, Lennertz has decided to raise a new fund in part because of the performance of its crypto holdings versus other investments, Tiedt told Fortune.

“We’re seeing real distributions from these funds, whereby when you have a tight market like now, everybody from private equity to venture is just struggling with lack of distributions,” she said. “Blockchain is actually sitting quite comfortably.”

While some traditional investors have stayed away from the often radioactive sector, which deals with a constant onslaught of regulatory issues alongside constant price swings, Tiedt said that Lennertz’s base of around 40 families—which she described as mostly entrepreneurs—supports its investment thesis.

“Our families are entrepreneurs themselves, so they understand the space and they’re very supportive of us being in the blockchain space,” she added.

The returns likely don’t hurt, either: The initial two funds both logged an internal rate of return over 35% per year, according to Tiedt. Blockchain comprises around 10-12% of the firm’s overall investments.

The past few years have been a rollercoaster for the crypto industry, with the bull market of 2021 giving way to the collapse of FTX in late 2022, followed by a modest recovery spurred by the approval of Bitcoin ETFs in early 2024.

Today, prices are largely stagnant for the major assets, with a low appetite for new token launches and consumer projects. But Tiedt said that Lennertz’s strategy of investing in other funds, rather than directly into companies and tokens, has helped it avoid the pitfalls of the recent volatility.

She expressed optimism that funds are beginning to look beyond infrastructure and middleware projects, with more adoption coming, especially at the B2B level.

“The topics that are interesting, of course, are everything around DeFi and everything around the cross of blockchain and AI,” Tiedt told Fortune. “So it’s all about distributing data versus centralizing data.”

In its third fund of funds, Lennertz plans to invest in eight to ten blockchain-focused venture capital funds, with some in Europe but the majority in the U.S.

So far, Tiedt said that Lennertz has raised enough capital to invest in two funds, Polychain and Bain Capital’s crypto fund.

As reported by Fortune, some traditional investors have steered clear of the crypto sector, despite its recent recovery from the depths of the 2022 bear market.

However, Lennertz's focus on multi-generational families, many of whom are involved in the tech industry, has enabled the firm to build a strong base of support for its blockchain investments, according to Tiedt.

“Our families are entrepreneurs themselves, so they understand the space and they’re very supportive of us being in the blockchain space,” she said.

The firm's strategy of investing in other funds, rather than directly into crypto companies and tokens, has also helped it navigate the recent market turbulence, according to Tiedt.

She added that funds are finally starting to explore applications beyond infrastructure and middleware projects, with more adoption coming, especially at the B2B level.

“I think everybody’s realized that the consumer stuff is not really taking off in the way that people thought it would, at least for now,” Tiedt said. “So everybody’s pivoting more toward B2B.”

Lennertz is not the only crypto fund that is raising new capital.

In September, Fortune reported that Accolade, a U.S.-based fund of funds, had raised $135 million across two vehicles and is likely still continuing to market.

Hack VC, one of Lennertz’s portfolio funds, has also raised $77 million.

Meanwhile, the crypto sector may still be far from its peak in 2021, but dry powder is starting to accumulate on the sidelines.

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