Miami Family Office Supports Launch of Fine Art Collector-Led NFT Fund
- The fund is among a growing number of new NFT-focused vehicles as institutional investors seek exposure to the space
- Liquidity is an issue with digital collectible funds, with hedging and private equity setups both vying for limited partner lock-in periods
An art collector is laying the groundwork for an NFT fund for institutional investors with backing from a Miami family office, Accretion Capital, according to two people familiar with the matter.
Edward Burillo, Founder Accumulation in 2013, plans to launch the vehicle in the second quarter, the sources said. The fund plans to invest in short-term games, including the purchase of NFT (non-fungible token) cool mints and related tokenomics projects, as well as a medium-term approach that emphasizes transactions based on market inefficiencies.
The sources were granted anonymity to discuss sensitive business transactions. Burillo declined to comment.
Accretion focuses on venture capital investments, ranging from pre-seed to Series B rounds. The new fund is set up as a separate entity from the family office. However, a number of undisclosed investment partners are also working on the launch.
The vehicle, dubbed the Accretion NFT Fund, is also poised to engage in longer-term strategies, including buying and holding blue-chip NFTs such as Bored Ape Yacht Club and CryptoPunks collectibles.
The fundraising comes as a growing number of crypto asset managers are meeting growing institutional investor interest in digital collectibles with funds specifically focused on this corner of crypto. Liquidity is an issue, with some portfolio managers favoring a private equity-style lock-up period – like traditional art funds – and others employing a hedge fund setup.
“In theory, to do this as a hedge fund, you have to [valuation] metrics,” a source said. “But if you think of it more as art, you have to stick it in a private equity fund.”
“There are a lot of money-making opportunities in this space right now. Prices are everywhere, and few traders actually know what they are doing.
Burillo raises a founder share class with preferential fees and a lock-up period. After it expires, limited partners will be able to redeem on a quarterly basis, a source said. It is unclear how much capital it raises overall.
Launches from anonymous NFT traders with strong track records are also attracting interest. Case in point: Punk6529, an influential voice on crypto Twitter, is launching an NFT-focused hedge fund, Blockworks reported.
Accretion also invests on its own in blockchain companies, including taking stakes in promising Web3 startups.
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