As an investor, Peter Thiel may be best known for his angel investments, most notably, his legendary call with Facebook. But now he’s got something for companies that sit just on the cusp between public and private markets. He’s launching a $402 million growth fund called Mithril for late-stage, privately-held companies.
Yes, it’s named after Mithril from the Lord of the Rings. (Bilbo Baggins gave Frodo a shirt made of Mithril chain mail once.) “It’s the choice form of silver from the deepest mines. It’s the toughest substance there is,” said Jim O’Neill, a partner in the fund who is also the former managing director of Clarium, and co-founder of the 20 under 20 Thiel Fellowship. “Peter and I are fans of Tolkien.”
Mithril won’t participate as early as Thiel’s venture firm Founders Fund does and it doesn’t handle publicly-traded assets like his hedge fund Clarium Capital. It invests across the entire technology industry and the fund doesn’t seem to have any preferences between consumer and enterprise companies.
Nor will it shy away from investments in the clean energy and biotech space, not unlike its early-stage peer Founders Fund, which is known for bolder and riskier bets in gene sequencing and cancer treatment companies. That fund just raised $625 million last year.
“This completes the whole geological picture,” O’Neill said. “Founders Fund is focused on startups and they do a great job at that. Clarium is global macro and focused on commodities, currencies and typically much more liquid investments. This fills in the final gap, which is growth-stage.”
Joining O’Neill, is Ajay Royan, who has also been a managing director at Clarium. Clarium isn’t quite as storied as Founders Fund, though. It managed $7.2 billion at its peak but then shrunk to under $1 billion after the 2008 financial crisis — not unlike many other hedge funds, which also suffered losses or faced redemptions during the downturn.
O’Neill says Mithril won’t be biased to co-invest or follow on with Founders Fund’s deals. ”Mithril is a very separate organization with different teams and different decision processes,” O’Neill said. “It will take a more economic perspective on what potential exists in various industries.”
As for the possibility of a late-stage correction following Facebook’s lackluster post-IPO performance, O’Neill remains pretty bullish.
“We’re very willing to be patient with a growth cycle that might take years to become apparent to other counter parties,” he said. ”We think in the long run this space makes sense for investors at all stages, even though there might be peaks, valleys, twists and turns in the short run.”