LONDON – Some universities on the east coast of the US have begun making small investments into cryptocurrency hedge funds, according to a lawyer in the industry.
John Lore, the founder of Capital Fund Law Group, told Business Insider: “We’re seeing some academic institutions getting involved on a limited basis for strategic reasons.
“I can’t say the names of [the academic institutions] because that’s attorney-client but we have people mostly on the East Coast that have begun doing investments in this space on a fairly modest basis.”
New York-based Capital Fund Law Group specialises in providing legal services to the hedge fund industry and has advised around 30 cryptocurrency hedge funds on setting up over the last year, according to Lore.
Lore said that the majority of investment in these new funds comes from “high net worth individuals and, on a very limited basis, family offices.”
“Yes there are investors but at this point, investors are putting in very small percentages of their net worth as we would expect and as I believe is appropriate,” Lore said.
He said he doesn’t expect to see institutional investors such as pension funds invest in crypto any time soon, due to regulatory uncertainty and the lack of a track record for many funds. One exception is university endowment funds, some of which have begun to invest in the space on a limited basis.
“We see academia as a tie between these somewhat young and enthusiastic fund managers and capital raising,” Lore said.
Universities have been growing increasingly interested in cryptocurrencies and the blockchain technology that underpins it. Blockchain is a shared, uneditable ledger of all transactions and is encoded with complex cryptography.
One of the developers of ethereum helped set up blockchain facilities at the universities of Edinburgh and Tokyo, and Ripple this week announced a $50 million research fund for blockchain and cryptocurrency. Leading universities around the world are also introducing courses on the technology, including Cambridge and Oxford.
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