StepStone Group’s $96M Blockchain PE Funds: Boon or Bane for Crypto & Investment Landscape?

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The venture capital arm of StepStone Group (STEP), a global private markets firm boasting $138 billion in assets under management, has recently garnered a combined $96.54 million for two versions of a blockchain-focused private equity fund. According to filings with the US Securities and Exchange Commission, the funds’ existence was initially unveiled in June, but subsequent amendments disclosed the sales figures.

The US-based StepStone VC Blockchain I, L.P. managed to raise $71,225,000 from 100 investors since its first sale on June 7, 2022. Meanwhile, the Cayman Islands counterpart attracted $25,315,000 over the same period from 41 investors. StepStone VC came into the fold through the acquisition of Greenspring Associates, a venture capital and private equity platform with $18.9 billion in assets under management at the time of the deal in September 2021. Now, StepStone VC boasts over 30 funds, with the latest additions being the first to bear a crypto-related name explicitly.

However, StepStone Group is no stranger to the world of crypto. The firm was among the limited partners supporting CoinFund’s $300 million Web3 fund announced in August last year.

Following these recent events, questions arise regarding the allocation and strategies for these new blockchain-focused funds. Will they prove beneficial to the blockchain ecosystem and private equity investors, or is there a potential risk of overcommitting to the still-evolving technology? While skeptics may argue that private equity funds’ entrance into the blockchain and crypto sphere may inflate market valuations, proponents will likely counterthesize that this endorsement reflects a broader acceptance of cryptocurrencies and blockchain technologies.

At this point, it is crucial to analyze the potential advantages and drawbacks of allocating capital to blockchain-focused funds in a private equity context. On one hand, such investments could provide an opportunity to diversify portfolios, tap into latent growth prospects, and reduce correlation with other asset classes. On the other hand, investing in blockchain technology might expose investors to considerable risks including: limited historical data, legal and regulatory uncertainty, and potential market fluctuations.

StepStone Group’s stance on the nature of these funds hasn’t been revealed, as the firm declined to comment when approached by CoinDesk. Nevertheless, the fact that prominent private equity players like StepStone are engaging with the blockchain and cryptocurrency space should not be overlooked. This development signifies an increased interest in the potential of digital assets and blockchain technology, fueling debate on the extent to which traditional finance institutions stand to benefit from this emerging sector.

Ultimately, the future of blockchain-focused private equity funds and their impact on the blockchain ecosystem and investment landscape remains uncertain, warranting further analysis and close monitoring by investors and stakeholders alike.

Source: Coindesk

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