The Pomp Podcast
Dan Zuller, Partner at Vision Hill Advisors: How Fund of Funds Examine Crypto and Digital Assets
- Vision Hill operates as a multi-strategy fund of funds, investing across five core crypto strategies: fundamental, quantitative, venture, smart beta, and opportunistic to capture diverse opportunities in the digital asset space.
- The crypto-native hedge fund and venture fund landscape held approximately $4.5 billion in assets under management at end of Q4 2018, with the top 20 funds controlling over 50% of total AUM, showing wealth concentration toward quality managers.
- Due diligence frameworks assess managers across quantitative performance data, qualitative evaluation of strategy and philosophy, and operational rigor including valuation methodology, key person risk, and business sustainability.
- Institutional sentiment shifted positively in early 2019 following JPMorgan Coin and Cambridge Associates announcements, with futures market backwardation flattening and indicators like DAI trading dynamics suggesting possible market bottom formation.
- DeFi and open finance represent significant opportunity but require managers as intermediaries for institutional entry due to counterparty and custodial risks; underlying value still depends on human capital and developer talent concentration.
- Private market valuations estimated at $15–$20 billion post-money valuation in Q4 2018, yet secondary market trades show significant discounts, indicating gap between paper valuations and realizable exit prices.