AAF Management is quickly developing a reputation as a powerful new player in venture capital. They’re doing incredible work through their new investment vehicle, the Axis Fund. This $55 million early-stage hybrid fund aims to capitalize on emerging managers’ first or second funds, typically under $50 million. This tactic increases AAF Management’s developing credibility. Having done so with such strong returns, the firm further cements its place as one of the rising stars of the investment landscape.
Even with this growing prominence, AAF Management has continued to take a very conservative view on the size of their funds. Previously, the firm has invested only in smaller funds. This change allows them to dig in further on their investments and have a better understanding of the startups they back. With the Axis Fund now fully raised, AAF Management’s total assets under management have risen to about $250 million across four funds.
To startup and emerging funds, The Axis Fund will direct approximately 80% of its capital to funding startups, and 20% to funding emerging funds. Together, these attributes allow AAF Management to assist high growth companies all the way from pre-seed through to pre-IPO. Such support is key in today’s rapidly changing marketplace. The firm has already done five direct investments in early-stage and growth stage startups through its new fund. Further, it has supported 25 pre-seed and seed-stage venture funds.
To that end, AAF Management has developed a remarkable track-record, making 138 direct investments across its four funds. It has invested with 39 different emerging managers. This move illustrates its serious pursuit to nurture up-and-coming talent in the venture capital world. The firm’s strategy has produced a track record of 20 profitable portfolio exits. These exits have reached almost $2 billion of total value, demonstrating the firm’s impressive track record in discovering high-potential companies.
The support for AAF Management’s fourth fund comes from a global and varied mix. Abu Dhabi’s Mubadala, various U.S., European, and Middle Eastern family offices, general partners from leading U.S. asset managers, a multi-billion-dollar U.S. venture firm, and a publicly traded company have all shown confidence in the firm’s ability to generate returns.
Omar Darwazah, a prominent figure at AAF Management, emphasized the importance of their focused strategy:
“Running a $50 million fund is very different from running a $500 million fund.” – Omar Darwazah
“Our strategy allows us to identify signal from noise and increase our probability of backing outliers — fund returners, 10x cash-on-cash companies, and seed-to-unicorn investments.” – Omar Darwazah
Beyond its unique investment strategy, AAF Management has done an admirable job of carving out a unique niche within the venture ecosystem. The firm has a stellar history of successful exits. They’ve seen acquisitions from large public companies such as TransUnion, Giant Digital, GoodRx and Affirm. These transactions serve to validate AAF Management’s capacity to source the most promising portfolio companies that generate interest from larger players.
Kyle Hendrick, another key player at AAF Management, discussed how the firm leverages its extensive network to support founders during their critical early stages:
“I’d say where we typically add the most value to a founder’s journey, especially in the early phase, is through our venture network.” – Kyle Hendrick
AAF encourages ESG-focused investors to engage in ongoing dialogue with its portfolio companies. They focus beyond simply investing capital, but providing strategic operating support to maximize network use.
The firm’s institutional history is a testament to that consistent upward momentum. It raised $39 million for Fund II in 2021 and established a $32 million fund-of-funds investment vehicle in 2017 aimed at a select group of limited partners. This new funding has set the stage for the Axis Fund’s audacious aspirations.
AAF Management has consistently found its own bright spot in the notoriously cutthroat venture capital sector. They prioritize emerging managers and early-stage investments. Its methodology allows it to tap into what Kyle Hendrick describes as “the richest dataset of private-market companies at the earliest stages of their formation over the past decade,” accessible primarily through limited partner checks in emerging managers.
