Meanwhile Group Launches Bitcoin Private Credit Fund
Meanwhile Group, a crypto startup backed by Sam Altman, has introduced a bitcoin private credit fund through its subsidiary Meanwhile Advisors. The fund, named Meanwhile BTC Private Credit Fund LP, aims to offer institutional investors access to bitcoin with an additional targeted 5% bitcoin-denominated yield. The fund plans to achieve this yield by lending bitcoin to borrowers. The goal is to raise $100 million and close the fund by the end of the first quarter of 2024.
The Structure of the Fund
The Meanwhile BTC Private Credit Fund is a single close, closed-end fund. Limited partners will contribute U.S. dollars, which will then be converted to bitcoin immediately after the single close. The bitcoin will be lent to borrowers to generate the targeted 5% return in bitcoin. This structure allows for potential exponential outperformance if the price of bitcoin rises during the fund’s lifecycle.
The minimum investment amount is $250,000 per limited partner with no maximum limit. The investment period is three years, followed by a four-year harvest period, resulting in a total term of seven years. However, capital will be returned to investors during the harvest period, so most of it will likely be returned before the seven-year mark.
Fees and Risk Mitigation
The fund will charge a 2% management fee and a 20% carried interest fee, both paid in bitcoin. The closed structure of the fund mitigates the risk of a “run on bank” situation that can lead to insolvency. Meanwhile Group aims to make conservative loans to creditworthy institutional borrowers, distinguishing it from lenders that collapsed last year.
Launch Amid Spot Bitcoin ETF Hype
The launch coincides with increased optimism about the approval of a spot bitcoin exchange-traded fund (ETF) in the U.S. Meanwhile Group believes that if the spot bitcoin ETF is approved, it will actually promote their own fund. The anticipation is that increased institutional demand for bitcoin will drive up its price, making the bitcoin-denominated returns of Meanwhile’s fund more attractive to investors.
Bitcoin Insurance Product
In addition to the private credit fund, Meanwhile Group’s insurance unit has launched a bitcoin-denominated life insurance policy. Premiums and claims are conducted in bitcoin, offering individuals a unique way to protect themselves financially. The company also plans to introduce an accidental death coverage policy in bitcoin.
Hot Take: Meanwhile Group Expands Crypto Investment Offerings
Meanwhile Group, backed by Sam Altman, is expanding its crypto investment offerings with the launch of a bitcoin private credit fund. The fund aims to provide institutional investors with access to bitcoin and generate a targeted 5% yield by lending bitcoin to borrowers. With a minimum investment amount of $250,000 per limited partner, the fund plans to raise $100 million and close by Q1 2024.
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