For the first time in history, two public pension funds scratch the surface of cryptocurrencies. The pension funds anchor Morgan Creeks crypto-focused venture.
Will pension funds invest in cryptocurrencies?
Morgan Creek is an asset manager and advisor that mainly focuses on family offices and institutional clients. They have a crypto-focused fund with about $40 million invested so far. However, the fund has gotten interesting for police officers, and other state employees who might get dividends from an unusual asset class. As of now, they might get cryptocurrencies and more specifically, bitcoin, as a part of their retirement plans in the future. The county, where its taking place is Virginia’s Fairfax. Katherine Molnar, chief investment officer of Fairfax County’s police officer’s retirement system, stated:
“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity.”
The two public pension funds collectively manage $1,2 billion in assets and now backs Morgan Creeks fund. Morgan Creek Blockchain Opportunities Fund already invests in several of the crypto industries most promising startups, such as Bakkt among others, and plans to invest in cryptocurrencies as well. Morgan Creek has invested in other famous companies such as Coinbase, a company with a current valuation of $8 billion. The fund look to further diversify through cryptocurrencies, but have not done so yet.
Why do pension funds look into cryptocurrencies?
Morgan Creek Digital co-founder Anthony Pompliano says that the fund primarily invests in equity, but also token-based companies in certain cases. It will eventually also hold small amounts of key cryptocurrencies. He added that pension funds want to diversify beyond stocks and more common asset classes. Morgan Creek uses that in their pitch to attract pension funds to the blockchain industry. The reason the blockchain fund choose cryptocurrencies is that it proves to be a hedge against other financial markets. When another market fall, the cryptocurrency market moves in the other direction.
“You can take a small amount of capital, you can put it in a nascent industry, you can manage your risk correctly but also get exposure to true innovation,” Pompliano explained.
In a recent Twitter post, Pompliano argued that institutions would not enter the market since they are already a part of it. Going forward, he adds that the blockchain fund will continue to invest in cryptocurrencies and companies building infrastructures in the new space. Since March of 2018, he has also raised a separate $500 million fund to invest in future tokens that he expects will represent shares in everything from works of fine art to real estate.While the pension funds are the first to enter the cryptocurrency space, they will most likely not be the last. Some of the world’s major players, such as Nasdaq, Fidelity, Intercontinental Exchange, Stuttgart Boerse among others lay the foundation for the blockchain industry. It might not be a question of if cryptocurrencies will become a part of our pension, but when.
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.