Sources: Fidelity Vet Launching Crypto Fund of Funds
A former Fidelity Digital Funds executive is launching a crypto fund of funds that would back both venture and hedge funds focused on digital assets, according to three people familiar with the matter.
Michael Zinaman plans to hold a first close on capital for the flagship vehicle of his new Dual Worlds firm in February, sources said. A second close would occur sometime later in the year, with the goal being to raise $50 to $100 million overall.
Sources were granted anonymity to discuss sensitive business dealings. Zinaman declined to comment.
The flagship vehicle, Dual Worlds Fund 1, plans to invest in crypto portfolio managers worldwide — ranging from new launches to established funds. It will write both limited-partnership checks and invest in general-partnership stakes or seeding deals from time to time.
Zinaman also plans to make direct equity investments, usually as a co-investment alongside a partner fund.
Fund of funds landscape
The number of newcomer crypto portfolio managers from top-tier investment backgrounds has increased exponentially in the last year, industry participants say. This, in turn, has led to a boom in the fund of funds market as more opportunities have arisen to get in on the ground floor of a new crop of digital asset investors.
“The fund of funds landscape is really interesting, right, because you have an emergence of crypto funds,” one source familiar with Dual Worlds said. “There’s a lot of them getting started, and they’re starting to really specialize. You’re starting to see funds that only do [decentralized finance], funds that only do gaming — you can go down the list.”
Indeed, Dual Worlds plans to focus on strategies specializing in what Zinaman views as the next frontiers of crypto: DeFi, non-fungible tokens, the metaverse, Web 3.0 and play-to-earn gaming.
Joining Zinaman at Dual Worlds are Chris Ott of family office Falcon Capital and Trevor Cohen of Nebari, an investment firm focused on natural resources.
Ott, a founding member and principal of Naples, Fla.-based Falcon, which runs a proprietary trading desk, is a general partner at Dual Worlds. Cohen, a hedge fund veteran and Nebari’s chief financial officer, holds the title of chief operating officer for Dual Worlds and also oversees financial functions.
Dual Worlds counts Matt Walsh, partner at the crypto venture capital firm Castle Island Ventures, as a strategic advisor — one of several high-profile advisors to the firm. Walsh declined to comment on Dual Worlds when contacted by Blockworks.
Zinaman also has a number of venture partners whose performance is taken into account when it comes to Dual Worlds’ marketing efforts.
Before working at Fidelity Digital Funds — the crypto asset-management arm of Fidelity, Zinaman spent time as a managing director focused on blockchain and digital assets for Canaccord Genuity.
He previously spent about a decade in institutional fixed-income sales, specializing in emerging markets.