BlackRock analysts quit to launch blockchain venture fund
By Paul Clarke for Financial News,
Trio joins Eterna Capital, a $20m fund investing in products that support the UN’s Sustainable Development Goals
Three BlackRock staff have quit their jobs to launch a $20m venture capital fund aimed at investing in blockchain projects, another example of investment professionals leaving large institutions to work with the technology underpinning digital currencies like bitcoin and ethereum.
Eterna Capital is led by CEO Andrea Bonaceto, who launched recruitment platform HiredGrad straight out of university in 2014. He started the fund in late April with Nassim Olive, Asim Ahmad and Mattia Mrvosevic, who until recently worked in BlackRock’s institutional client business.
The firm’s approach is to invest in products that align with the UN Sustainable Development Goals, which target issues such as world hunger, poverty, clean water and affordable clean energy.
However, all of the companies it targets must use blockchain to achieve these aims.
“One example is the disintermediation of banks in under-banked third-world countries, so people don’t need banks to get a loan, as the money can be held on the blockchain,” said Bonaceto.
“Or selling solar power between neighbours, rather than relying on an energy firm, is another example of how blockchain can be used for social impact.”
It will target institutional investors and is aiming to raise $20m to put into these projects.
Olive said his work with insurance firms at BlackRock convinced him there was an institutional appetite to invest in blockchain, but that the size of the market means big investors are still unwilling to invest directly into these types of vehicles.
“2017 was the year of bitcoin and ICOs [initial coin offerings], but we’re convinced 2018 will be when blockchain and cryptos will rise as an asset class, and when institutional money moves into this market,” he said.
The former BlackRock employees join a wave of financiers quitting big banks and fund managers to start their own crypto ventures. In January, BlackRock duo Adam Grimsley and Michael Wong left to start crypto hedge fund Prime Factor Capital, while ex-Goldmanite Mike Novogratz is launching a crypto merchant bank called Galaxy Digital.
Olive said there was “no way they [large institutions] will risk the reputation risk by launching a $20m-$100m blockchain or crypto fund”. He added: “This is why more people with an institutional track record are launching their own ventures.”
Correction: This article was updated on May 2 at 9.27am to correct the spelling of Asim Ahmad’s name.