Janus Henderson will be serving as a sub-adviser to the LTF, managing the fund’s day-to-day operations and portfolio through Tabula, a wholly owned subsidiary.

The firm writes that this synergy between Tabula’s specific investment tools, which will be crucial to ensuring the fund meets the high standards expected by institutional investors, and Janus Henderson’s 90-year track record of financial expertise, will bring traditional investment products to on-chain capital markets, realising untapped potential in the immediate term.

“This collaboration represents a significant step forward in bridging traditional and decentralised finance, by bringing robust institutional collateral pools into decentralised autonomous organisation and stablecoin ecosystems”, says Nick Cherney, Head of Innovation at Janus Henderson. “Our innovation strategy is focused on preparing for the possibility that blockchain technology will transform traditional finance in the long term, and this partnership represents a unique opportunity to help shape this future, while also providing stable and compliant solutions for on-chain markets”.

The firm writes that blockchain readiness and tokenisation are key pillars underpinning Janus Henderson’s innovation strategy, and the decision to partner with Anemoy and Centrifuge in this way reflects the firm’s commitment to digital assets and its desire to embrace disruptive financial technologies.

“By collaborating with companies who are critical to the transition of asset and wealth management onto distributed ledger technology, Janus Henderson is adopting a leadership role in the new age of digital disruption in financial markets, positioning itself as a serious partner for future blockchain opportunities.”

“As the LTF will be tokenised using Centrifuge’s blockchain technology, this will enable it to be distributed to over USD170 billion in idle capital on-chain. Anemoy, which owns the fund, plays a vital role at the intersection of traditional and decentralised finance, acting as a strategic conduit for Janus Henderson’s successful entry into this digital space.”

Janus Henderson recently announced that it had entered into an agreement to acquire a majority stake in Victory Park Capital Advisors, LLC (“VPC”), a global private credit manager providing customized solutions to both established and emerging businesses, including decentralised finance. The VPC acquisition further expands Janus Henderson’s private credit and institutional capabilities, and along with the acquisition of Tabula, demonstrates the firm’s commitment to client-led innovation, the firm says.

“We are thrilled to be collaborating with Janus Henderson and Centrifuge on this fund”, says Anil Sood, co-founder of Anemoy. “Janus Henderson is entrusted with over USD360 billion in assets, has a 90-year legacy of investment excellence, and a client-driven solutions focus; we could not think of a better partner with which to progress tokenized innovation”.

Martin Quensel, co-founder of both Anemoy and Centrifuge, says: “This partnership underscores our commitment to pioneering the integration of traditional financial products with cutting edge blockchain technology, creating new opportunities for investors, and advancing the decentralised finance ecosystem”.

“The intersection of DeFi, TradFi, and systematic investing is an area that should create huge opportunities for investors in the coming years.  It is a natural overlap between the rapid expansion of ETF solutions and the need to underpin digital investments with stable, liquid stores of value, like US Treasury bills” comments Michael John Lytle, Tabula’s CEO.

Utilising a public blockchain with permissioned access controls, and limiting subscriptions to investors with whitelisted wallets, is intended to mitigate the operational and compliance risks that have previously hindered widespread institutional adoption of tokenized funds.

“We are delighted to be working with Janus Henderson and Anemoy to not only address key challenges in fund management, but also to open the door to scalable solutions that have the potential to transform the financial industry”, says Bhaji Illuminati, CMO at Centrifuge. “The Anemoy Liquid Treasury Fund is a good example of how traditional finance can leverage distributed ledger technology to unlock new opportunities in the blockchain space”.

Typically, prices start to rise. They attract new interest. There’s new buzz and projects that have been building through the bear market launch. Because the market is more receptive, it attracts new developer talent that build new projects, and those plant the seeds for the next cycle. And that flywheel continues until you hit the exuberance stage. Then you get into a bubble and prices collapse. The excitement is gone and it’s back to building again until the new cycle. 

What we’re seeing now is that we’re now clearly in the early stages of a new cycle, which is actually the fifth such “price innovation cycle”, as we call them. So liquid prices are moving up. And, as typically is the case, it’s led by bitcoin. We’ve seen the first seeds that were planted in the last cycle go live and unlock new possibilities. Very clearly this time around, it’s around scalability of the technology, which opens up the technology to new use cases such as gaming and social and entertainment.

So now bitcoin is at a new high, but most other liquid prices are still well below 50 per cent off from their peaks. And if we look at previous cycles for some indication, we would expect things to heat up over the next 12 to 18 months, probably hitting peak excitement somewhere next year. Estimates of where the market cap outside of bitcoin can go is from the current USD1.3 trillion in liquid markets to somewhere between USD4 and USD10 trillion. So this is an enormous opportunity.

We believe that an even better way to invest in this technological revolution is not through the liquid tokens but through backing the founders that are building the future blockchain networks, in their earliest, private funding rounds. Blockchain technology is the foundation for a trustless economy, and most of the new infrastructure is still to be built. It will disrupt the trusted intermediaries that today are needed for people to transact with each other and will propel our financial systems and commerce into the digital age, much as the previous generation of internet protocols revolutionized information and media.

Accessing the private funding rounds is difficult though, and requires both deep, specialised knowledge and value add to founders. As a result, the most promising projects are fully funded by a relatively small group of crypto-native venture capital firms. And in contrast to the liquid markets, the private market structure still very much reflects a bear market. All generalist VCs are still gone and early-stage valuations remain attractive despite an initial increase from the troughs. 

The best way to think about the attractiveness of the early, private rounds is the stack of structural advantages that largely stem from the nascency and the uniqueness of this industry and how counterintuitive it is, all factors that keep most traditional investors still at bay. 

Most importantly, there is a massive knowledge gap. Very few investors have the deep technical know-how that is required to know what needs to be built and to diligence the founders that claim to build it.  Another point is that, as a founder, if you build a decentralised protocol, by definition, you cannot hold on to complete ownership. 

You have to distribute ownership early on. So founders will sell part of the future protocol early on to those that provide the most added value and also the strongest signal to the community to which they they look to distribute the protocol. And then there is the early liquidity compared to traditional venture investments. Most protocols take one to four years to be built before they are launched publicly. For the private phase VCs that offers the choice of holding on to the liquid tokens in the public phase or to realize the investment early. 

Over six years ago we identified the attractiveness of investing in this new infrastructure in the earliest, private-stage phases. Since then we have relentlessly focused on building deep relationships with all the top specialised VC firms and many of the industry’s leading founders. This has given us early, private-stage access to the vast majority of successful projects launching over the past years. While accessing the best early-stage deals is getting more and more competitive as the industry matures, the industry is still quite nascent and our approach demonstrates that it can be done with conviction in the technology.

Theta Blockchain Ventures IV is a continuation of Theta’s fund of funds programme investing in crypto-native VCs. The firm has deployed over USD650 million to date and writes that it has backed many leading companies and protocols from the earliest stages through its wide network of specialised VC firms. Through its series of blockchain venture funds, Theta has been capturing exposure to over 80 per cent of the leading crypto projects, all from an early stage.

Ruud Smets, CIO, Theta Capital, says: “We have turned the corner on the 2022/2023 crypto winter and are at the start of the industry’s fifth price-innovation cycle. We think there is a generational investment opportunity available now to invest in the future of blockchain infrastructure.”

The first close of the fund will be on 1st April 2024. Theta is targeting a total of USD200 million in commitments with subsequent monthly closings leading up to an expected final close on July 1st 2024.

The launch of the fund follows Theta’s recent publication of a report on the future of investment in blockchain technology, “The Satellite View”. The report features insights and outlooks from crypto’s leading experts including many of the crypto-native venture funds Theta invests in.

The report argues that “blockchain technology is the foundation enabling the next evolution of the internet.  It will propel our financial systems and commerce into the digital age, much as the previous generation of internet protocols revolutionised information and media.”