Key Takeaways
- • Lennertz & Co., a German multifamily office, is raising $165 million (approximately €150 million) for its third blockchain-focused fund of funds, positioning itself as one of the largest operators in this space.
- • The firm has already achieved its first close on Blockchain Fund III, though the specific amount was not disclosed; the fund targets investments in eight to ten blockchain-focused venture funds.
- • Lennertz has progressively increased its blockchain exposure through three vehicles: a $35 million fund of funds launched in 2020 and a $65 million second fund in 2022, demonstrating sustained conviction in the sector.
- • The decision to raise a third fund is driven by superior performance and cash distributions from blockchain investments relative to traditional private equity and venture capital, particularly relevant given current market constraints limiting distributions elsewhere.
- • Investment strategy focuses on established cryptocurrency venture capital firms including Multicoin, Polychain, Hack VC, Bain Capital, Lightspeed, and Andreessen Horowitz, rather than direct exposure to portfolio companies or token deals.
Summary
Lennertz & Co., a multifamily office established in 2015, is undertaking its largest blockchain investment to date with a $165 million capital raise for Blockchain Fund III. According to Fortune's exclusive interview with the firm's head of fund investments, Oksana Tiedt, the vehicle has already completed its first close, marking continued momentum in the firm's cryptocurrency strategy despite volatile market conditions. The fund targets approximately eight to ten blockchain-focused venture funds as underlying investments.
This represents the third major blockchain vehicle for Lennertz since the firm began allocating to the sector around 2016. The firm initially made private investments before launching its inaugural $35 million fund of funds in 2020, followed by a $65 million second fund in 2022. The progressive scale-up underscores sustained institutional confidence in blockchain venture returns even as the broader crypto market has experienced significant volatility, including the FTX collapse in late 2022 and subsequent recovery following Bitcoin ETF approvals in early 2024.
Lennertz's fund-of-funds structure differs from direct venture investing; rather than backing individual portfolio companies or token transactions, the firm deploys capital into established cryptocurrency venture capital managers. Blockchain Fund III targets relationships with well-known crypto-focused VCs such as Multicoin Capital, Polychain Capital, and Hack VC, while also accessing generalist firms with cryptocurrency strategies including Bain Capital, Lightspeed Venture Partners, and Andreessen Horowitz.
Tiedt attributed the timing of the third fund raise to outperformance of blockchain holdings relative to other asset classes. "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 stated in the Fortune interview. "Blockchain is actually sitting quite comfortably." This positioning is notable given the current market environment, characterized by stagnant prices in major cryptocurrency assets, limited appetite for new token launches, and depressed consumer-facing blockchain projects—conditions that have typically constrained venture distributions across traditional venture and private equity markets.
This represents the third major blockchain vehicle for Lennertz since the firm began allocating to the sector around 2016. The firm initially made private investments before launching its inaugural $35 million fund of funds in 2020, followed by a $65 million second fund in 2022. The progressive scale-up underscores sustained institutional confidence in blockchain venture returns even as the broader crypto market has experienced significant volatility, including the FTX collapse in late 2022 and subsequent recovery following Bitcoin ETF approvals in early 2024.
Lennertz's fund-of-funds structure differs from direct venture investing; rather than backing individual portfolio companies or token transactions, the firm deploys capital into established cryptocurrency venture capital managers. Blockchain Fund III targets relationships with well-known crypto-focused VCs such as Multicoin Capital, Polychain Capital, and Hack VC, while also accessing generalist firms with cryptocurrency strategies including Bain Capital, Lightspeed Venture Partners, and Andreessen Horowitz.
Tiedt attributed the timing of the third fund raise to outperformance of blockchain holdings relative to other asset classes. "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 stated in the Fortune interview. "Blockchain is actually sitting quite comfortably." This positioning is notable given the current market environment, characterized by stagnant prices in major cryptocurrency assets, limited appetite for new token launches, and depressed consumer-facing blockchain projects—conditions that have typically constrained venture distributions across traditional venture and private equity markets.
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