- Layer1, a new crypto fund, is aiming to be an activist investor in the nascent market
- It’s being backed by Peter Thiel and DCG
Carl Icahn. Bill Ackman. Dan Loeb.
These investors are some of the best known in the hedge fund industry for being so-called activist investors, stock-traders who not only make a bet on the direction of a company but actively use their shareholder power to influence company management. Now, crypto has an activist investor of its own: Alexander Liegl.
Liegl doesn’t have the same pedigree as the aforementioned rock stars, but he has high hopes for his new fund, Layer1, which will make investments in key crypto projects and then build out supporting infrastructures for those investments. It is a bold move given the market backdrops and comes at a point when many funds are abandoning the old buy and hold investing model. Still, the firm’s model is unique, says Liegl.
“The angle is we take very concentrated bets on blockchain protocols that we are interested in,” he said. “And then we build the tech around them and accumulate exposure by buying it and mining it and then we have a very hands-on approach to actively shape the investment we hold.”
In a sense, he says, the firm is hybrid of investing firm Polychain and Blockstream, a firm which aims to build the infrastructure for bitcoin.
To be sure, Layer1 isn’t moving into projects to quickly make changed to raise the value and the dump the project. They are operating on multi-year investment horizons, Liegl said. “We know this takes time. It takes time for the engineering processes to get priced in. This isn’t a pump and dump. We are going to be constructivist.”
The firm’s model has attracted big-ticket investors, including tech billionaire Peter Thiel, who joined Digital Currency Group in backing the firm in the closing of its $2.1 million seed round.
“We believe there is huge potential for a hands-on, mission-driven investor to take a concentrated position in a single cryptocurrency, and then dedicate talent and resources to significantly accelerate its development,” wrote Travis Scher, VP Investments at Digital Currency Group. “Alex and his team are extremely talented and we are excited to support them.”