According to Bloomberg, ParaFi will use part of the funds to acquire general partner stakes in other crypto funds that focus on specific markets, strategies or geographic regions. The company plans to build 30 to 50 such portfolios in the next three to five years.

ParaFi has backed nine different crypto fund managers over the past few years and is now expanding the strategy to outside investors. Forman said general partner shares are a growing asset class in traditional finance but have yet to exist at scale in crypto.

As institutional capital enters the space, more crypto funds are expected to emerge. This year, crypto funds have begun raising funds after digital asset prices recovered from the market crash in 2022. ParaFi is one of the well-known and larger crypto funds, with a team of 22 people, operating hedge fund and venture capital strategies.