Crypto anon McKenna launches Arete Capital, with first fund targeting $20 million

Crypto anon McKenna’s newly created investment firm, Arete Capital, launched its first hybrid fund on April 1, targeting a size of $20 million. 

McKenna is a well-known crypto anon and derivatives trader who was recently a researcher at ROK Capital. They created the fund alongside co-founder Ilya Paveliev, who has experience in traditional investment management and was formerly head of growth at blockchain infrastructure company Haruko. 

The founders told The Block in an interview that the fund had reached $10 million in commitments by its launch and is expected to close the full amount over the next two months.

Half of the fund will be allocated to venture investments, while the other half will go to liquid token investments. It will predominantly focus on institutional DeFi, real-world assets, blockchain gaming and other emerging crypto ecosystems.

The fund has named three advisors: Collin Erickson, an independent advisor to projects such as Centrifuge; crypto anon SparkC, co-founder of crypto gaming group WolvesDAO; and crypto anon Odysseas, an engineer at Phylax who was formerly at Nomad.

Setting up the fund

The two founders say they met less than three years ago through a London-focused group of people who had moved from traditional finance into crypto. They stayed in touch during the bear market that followed the collapses of crypto hedge fund Three Arrows Capital and crypto exchange FTX. 

McKenna said the rock-bottom prices and low sentiment in their wake suggested it was the perfect time to leave their research position and start their own fund. They joined forces with Paveliev in the second half of 2023, wanting to combine their crypto-native experience with the latter’s institutional knowledge. They also started publishing crypto protocol research articles under the name Arete Research.

“Arete Capital was basically an evolution of Arete Research and us coming together, with very complementary backgrounds,” said McKenna. “And I think we have the capacity to create this tier one manager over the next three to four years.”

The team plans to make a few strategic hires over the next few months but intends to remain lean.