LONDON, Private equity groups have sat on the sidelines of the crypto boom, which has seen the value of bitcoin and ether rally by 400% and 1,400% over the past two years. An EY survey found that only 3% of the largest buyout firms had invested in crypto-related assets.
That could be changing. Apollo Global Management (APO.N) recently poached JPMorgan’s (JPM.N) global head of blockchain and crypto, Christine Moy, while Thoma Bravo in November hired Christine Kang to lead its crypto investments. Swedish buyout shop EQT (EQTAB.ST) on Friday announced that Brooks Entwistle, a former Goldman Sachs (GS.N) banker who works at blockchain company Ripple, would join its board.
The obvious place for buyout groups to start is through so-called growth equity investments – a similar business to venture capital but focused on more mature startups. The next question is when we’ll see the first big blockchain company buyout. Crypto volatility makes it tricky to buy companies that hold the actual currencies, like bitcoin. But there is a slew of blockchain-services companies selling things like custody software, essentially the “picks and shovels” in the digital-assets goldrush. Some of them might find a home in private equity.