University of Michigan Endowment Ups Investment in Andreessen Horowitz Crypto Venture Fund

The University of Michigan’s $12 billion endowment plans to bolster its investment in a “cryptonetwork technology fund” (CNK Fund I) managed by American venture capital firm Andreessen Horowitz. The development was revealed in the agenda for the university’s Board of Regents meeting on Feb. 21.

According to the document, the endowment had already committed $3 million to CNK Fund I in June 2018 and has now included it as an approved partnership for a follow-on investment, amount unspecified. The agenda states that the fund — created by the Menlo Park, CA-headquartered Andreessen Horowitz — “invest[s] in cryptonetwork technology companies across the spectrum of seed, venture, and growth stage opportunities.”

The document outlines the rationale behind backing the Andreessen Horowitz dedicated crypto fund, noting that crypto “has become an important area of innovation and entrepreneurship that warrants focused attention” and that it is regarded as “a distinct type of technology by entrepreneurs, funding sources, and developers.”

The agenda continues:

“As opportunities related to cryptonetworks transition from being undefined to becoming more visible and sharply defined, the·need for a separate thematic fund may recede. In addition, the regulatory landscape for crypto-based investments is potentially more cumbersome than is the case with the sort of traditional IT investing that otherwise characterizes AH's activities.”

As previously reported, several high-profile prestigious university endowments have started to back crypto-focused funds.

In October 2018, Ivy League school Yale — which has the second-largest endowment in the United States — was revealed to be one of the investors that helped to raise $400 million for a major new crypto-focused fund created by veterans from Coinbase and stalwart crypto fund Pantera Capital.

That same month, it was reported that fellow Ivy League titan Harvard — whose ~$39.2 billion endowment for the 2018 fiscal year was the largest of any university endowment globally — had invested capital into “at least one cryptocurrency fund.” The report made the same claim for four further prestigious U.S. schools — Stanford University, Dartmouth College, the Massachusetts Institute of Technology (MIT) and the University of North Carolina.

In December 2018, Spencer Bogart — partner at venture capital firm Blockchain Capital — noted that the entrance of major university endowments into the crypto space demonstrates the increased institutionalization of the asset class.

This month, major pension and endowment consultancy firm Cambridge Associates published a research note arguing that crypto represents a worthwhile investment for institutions “with an eye toward the long term.”