Multi-strategy crypto investment firm Parataxis Capital expects to triple the assets under management for its $35.6 million digital yield fund by the end of the year, with a further ambitious target of $500 million by the end of 2023, co-founder and CEO Edward Chin told CoinDesk in an interview. Chin said the target is based on conversations with the firm’s allocators, who help institutions decide where to invest money.
Parataxis, which currently has about $116 million in assets under management, primarily focuses on institutional investors such as banks, family offices and pension endowments. The market-neutral Parataxis Digital Yield Fund made headlines in August when Fairfax County, Virginia’s, $6.8 billion pension fund, the Fairfax County Retirement Systems, said it would invest $35 million in the yield farming fund. Fairfax, one of the first U.S. pensions to invest in crypto, made a two-part bet on yield farming, a term that refers to any effort to generate the most returns possible on crypto assets through a variety of methods.
Parataxis also manages the multi-strategy Absolute Return Fund, which adjusts its strategy according to the current market cycle. The fund had $69.5 million in assets as of the most recent filing in April. And the $9.6 million Special Opportunities Fund focuses on what the firm calls liquid venture capital, making seed-stage investments in “promising protocols and token-based technologies,” said Chin.
Parataxis was founded three years ago by Chin and Thejas Nalval, who serves as chief investment officer at the firm. Parataxis stands out in the crypto investment space as a disabled veteran-owned small business, according to Chin, who served in the U.S. Army. He previously worked as an investment banker at digital asset banks Galaxy Digital and the Element Group and spent years in traditional finance, including Credit Suisse. Nalval was previously a portfolio manager with crypto hedge fund LedgerPrime and met Chin at Element Group. He spent eight years at Goldman Sachs, most recently as a trader in the macro trading group.
“We have a good sense for how [institutional] allocators are looking at the space,” explained Chin. “We try to understand what’s important to our prospective limited partner base and try to develop products and investment strategies that would appeal to them versus creating something and hoping the market would get there.”