Sovereign Wealth Fund Vet Eyes $150M for Crypto Fund of Funds

Before forming Nural, Rabia Iqbal worked for Mubadala, Coatue Management and Morgan Stanley
The fund of funds plans to back both crypto and venture capital managers, as well as investing directly in tokens and equity plays

A former sovereign wealth fund professional is targeting $150 million for crypto fund of funds under the Nural Capital banner, betting on the Web3 revolution, with backing from one of the industry’s biggest moneymakers.

Rabia Iqbal plans to close the new firm’s first fund at the end of February, according to a source familiar with the matter and marketing materials obtained by Blockworks. Iqbal declined to comment.

Nural’s flagship vehicle, First Light Fund, plans to deploy capital to crypto-focused hedge and venture capital managers, along with token investments and direct equity stakes in the blockchain sphere.

“First Light was constructed to maximize alpha, while avoiding the need to actively manage a portfolio of funds, tokens and equity positions,” the marketing materials state.

The firm, which has a presence in New York, Hong Kong and Puerto Rico, is backed by Kenetic Capital, a proprietary investment firm that has invested in BlockFi, FTX and Solana in seed rounds. Kenetic executives Jehan Chu and Tony Gravanis are Nural general partners — and contributing to a sizable GP commitment for the fund.

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Iqbal’s venture is one of a growing number of crypto fund of funds operators to emerge lately, drawn by an abundance of portfolio managers to launch funds in the space in the last year or so. Former Fidelity Digital Funds executive Michael Zinaman is also attracting the interest of institutional investors for his crypto fund of funds, Dual Worlds.

The source said Nural has an edge in being woman-run and minority-owned, a boon to institutional investors looking to diversify their portfolios — plus having the backing of crypto natives.

Indeed, more than half of the firm’s roster of fund managers come from diverse backgrounds, according to the marketing materials.

What’s Next for Nural

Nural already has its second and third funds on the horizon. The firm is aiming for the second quarter to launch Dawn Fund 1, which is targeting $100 million to make anchor investments with preferred fee terms in emerging managers focused on specific sectors.

Also slated for the spring is Halo Fund 1, shooting for $50 million to serve as a companion fund to First Light 1, including co-investments and follow-up opportunities.

First Light’s starting portfolio includes about 10 investments that are expected to enter the fund with mark-ups on profits, including recently backing the decentralized finance (DeFi) infrastructure startup Quredo. Iqbal has also invested with Simão Cruz’s Lightshift Capital.

The fund’s portfolio is earmarked in thirds to established crypto fund managers, emerging funds and token investments, plus direct equity plays.

Part of the appeal, according to the marketing materials: getting access to managers who do not accept new investors or small checks. Iqbal’s pitch to managers, as it turns out, includes getting their foot in the door on co-investments.

“The window to access the best crypto native managers is closing, while minimum investment thresholds are increasing,” the marketing materials say.

It imposes a minimum investment of $1 million, though limited-partners chipping in $3 million get priority on co-investments. The fund has a 10-year lockup, with an optional two-year extension.

Iqbal’s due diligence process includes qualitative and quantitative analysis, including tapping a proprietary fund database. She’s also poised to benefit from Kenetic’s deep access to deal flow.

Iqbal previously spent about four years in business development roles for Dubai sovereign wealth fund Mubadala. Her previous employers include Coatue Management and Morgan Stanley, and she has been personally investing in crypto since 2017.

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