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What is Three Arrows Capital? Upcoming investment trends of 3AC

What is Three Arrows Capital?

Three Arrows Capital (3AC) is a hedge fund management company founded in 2012 and focused on providing risk-adjusted returns. The two heads are Su Zhu and Kyle Davies and are headquartered in Singapore. The company has shown tremendous growth since its inception with ambitious long-term plans for the future.

3AC’s investment strategy is to target emerging asset markets, especially cross-border asset markets.

Three Arrows Capital is a familiar name in the Crypto market. In 2021, the fund has made major investments in the market that have marked important turning points in the financial market. The projects they invest in have high returns.

Team

Three Arrows Capital was founded by Su Zhu and Kyle Davies.

Su Zhu

Su Zhu graduated from Colombia University – New York. After more than 5 years of experience in the field of traders, and a stint at Deutsche Bank, Su Zhu decided to stop working in the recognition of wages and together with Kyle Davies founded Three Arrows Capital and has held the position of CEO/ CIO of 3AC for almost 10 years. In addition, Su Zhu is also the Co-Founder of Sensus Markets.

Su Zhu – Co-Founder 3AC
Su Zhu – Co-Founder 3AC

Su Zhu is one of the most influential people in the Crypto market with Twitter reaching over 400k followers. Su Zhu often shares about the market situation and personal predictions on his Twitter page and is very interested in the community. Su Zhu is also considered as one of the trendsetters.

Kyle Davies

Kyle Davies graduated from Colombia University – New York, fluent in several languages such as: English, French, Japanese, Thai.
Prior to joining Three Arrows Capital, Kyle was a derivatives trader at Credit Suisse in Hong Kong. After working in the traditional financial sector, Kyle Davies realized the great potential of multinational financial markets, commodities and connectivity opportunities between different regions of the world, from Kyle Davies and Su Zhu co-founded Three Arrows Capital.

Kyle Davies – CEO
Kyle Davies – CEO

Special features of 3AC

Unlike other investment funds, 3AC also invests in other investment funds, they know that sometimes it is not possible to do in-depth research and coverage in this large market alone, so they have an alternative strategy. As they expand their portfolio to other projects, they research and build relationships with funds.

Building relationships and investing in other funds is a wise move because each fund has a different strength and they want to go long in this market. Funds in which they have invested:

  • Multicoin Capital: A hedge fund and venture fund management company, investing in both public and private markets.
  • Play Ventures: Focus on investing in game service startups
  • DeFiance Capital: Focused on DeFi investing.

……..

Portfolio

Infrastructure

  • Avalanche: Blockchain layer-1 functions as a foundation for dApps and custom blockchain networks. June 2021 Three Arrow Capital & Polychain invested $230 million to promote DeFi development on this ecosystem.
  • Polkadot: A multi-chain framework, similar to Cosmos designed to facilitate the interoperability and scalability of blockchains
  • Solana: A decentralized blockchain built to enable user-friendly applications to scale around the world.
  • Kusama: An experimental blockchain platform designed to provide a widely interoperable and extensible framework for developers.
  • Mina Protocol: The world’s lightest blockchain network. Mina has a concise blockchain, compressed to the size of just a few tweets (22kb).
  • Dogecoin: Based on the popular Internet meme “doge” and featuring the Shiba Inu symbol on the logo. The creators of Dogecoin claim that it is a fun, light cryptocurrency that will have great appeal.

AMM DEX

  • Trader Joe’s: Trader Joe is an AMM decentralized exchange platform on the Avalanche blockchain. Joe is the folk version of Uniswap. with over $1 billion TVL in the protocol at the moment. At the beginning of September, Trader Joe completed a capital call of 5 million USD, including 3AC round angel investors.
  • Sushi: Uniswap V2 fork DEX, currently the number two largest DEX in the market, running on 16 different chains and TVL with over $6.7 billion at the moment.
  • Kyber: Kyber Network had a successful ICO of $60 million at the end of September 2017, and is one of the first generation decentralized exchanges.
  • Orca: A decentralized exchange (DEX) developed and operated on the Solana platform. 3AC participated in an $18 million funding round with Polychain in October 2021.
  • WOO: A DEX that operates under the orderbook mechanism, raised capital in September 2020. 3AC takes the lead in this round, raising up to 30 million USD in November 2021
  • Balancer: One of the early DEXs, with a huge user base and TVL volume on Ethereum. 3AC participates in 5 million USD funding round in February 2021
  • DODO: A decentralized exchange with a new On-chain liquidity solution combining AMM and Oracle called PMM – Proactive Maket Maker. 3AC participated in DODO’s $5 million funding round in October 2020.

Gaming & NFT

  • Nyan Heroes: An NFT-based game built on the Solana blockchain. Through collecting Nyans and their accompanying giant robots, players will join Play to Earn Metaverse’s battle against each other.
  • Axie Infinity: A Pokémon-inspired universe where anyone can earn tokens through skilled gameplay and ecosystem contributions.
  • Avocado Guild: A game guild on Solana, successfully raised $18 million at a $200 million valuation, at the end of November 2021. The project has only been in operation for only 6 months.
  • Solice: A Metaverse project on Solana raised $4.36 million at the end of November 2021 for their seed round. Participating funds include 3AC, Animoca Brands, and DeFiance Capital.

Lending Protocol

  • Aave: The market leader in lending that is already active on multiple chains outside of Ethereum, including Polygon, Avalanche.
  • Jet Protocol: Money market on Solana, has just successfully raised $6.8 million and has the participation of 3AC, Alameda, CMS…
  • Ardana: Debt Protocol on Cardano, the deal was just completed and announced not long ago.
  • mStable: A Debt Protocol on Ethereum.
  • MeanFinance: A lending protocol built on Solana. Newly announced project 3AC, SoftBank, DeFinance led the investment round worth $ 3.5 million at the end of November 2021.

Funds

  • Coincident Capital: A leading crypto hedge fund. Focus on obtaining superior risk-adjusted returns through long, short trading of top cryptocurrencies.
  • Multicoin Capital: A firm dedicated to investing in cryptocurrencies, tokens and blockchain companies that is reshaping trillion dollar markets. The company manages hedge funds and venture funds, investing in both public and private markets.
  • DACM: Provides a centralized, transparent and professionally managed investment in the world’s fastest growing asset class.
  • Play Ventures: Invest in free-to-play game studios and game service startups from around the world.
  • Hypersphere: Venture capital firm that invests in and develops blockchain technology. It was founded by Robert Habermeier and Jack Platts and is headquartered in Austin, Texas.
  • DeFiance Capital: A DeFi-focused crypto fund that combines fundamental research with an active approach. The focus on DeFi is closely coupled with DeFiance’s thesis on DeFi: DeFi will eat away at traditional finance over the next decade.

Evaluate

Profit

Some fund portfolios have quite large returns with some projects such as:

  • Polkadot(DOT): 1100%
  • Solana(SOL): 15000%
  • Axie Infinity(AXS): 30000%
  • Dodo Exchange(DODO): 4500%
  • Woo Network(WOO): 3500%
  • Mina Protocol(MINA): 2400%
  • Ardana(DANA): 5000%

The remaining portfolios are also quite heavily invested projects and sit with large investment funds. The most recent standout deal was that they led the way in investing in Near’s ecosystem, raising a total of $150 million. The projects that 3AC invests in are mostly quality projects with high profitability.

Investment Trends

  • Up to now, in 2021, the fund has invested in a total of 24 projects. In which arrays like Layer1, AMM DEX, Derivatives they poured the most money.
  • In addition to layer 1, they focus on investing in projects on the Ethereum ecosystem..
  • The Layer1 projects that they invest in are all great projects and have large marketcaps in the market.

Summary

Three Arrows Capital was founded in 2012, at a time when the market was still in its infancy and most of the data was scarce. The projects during this time are not many, mainly only Bitcoin is pioneer. From there we can get a feel for the vision and direction of Three Arrows Capital. The projects invested by Three Arrows Capital have achieved a fairly high growth rate and have a high probability of success. The fund’s portfolio has many very quality projects, and has also been at the forefront of Defi since quite early.

Recent investments are geared towards new areas a lot. In addition to the investment rounds, 3AC also sits with many of the largest and most prominent funds in the market, proving their position in the investment market.