Two US public pension funds that mange close to $6 billion in combination have become anchor investors in a new $40 million venture-capital fund.
The Police Officer’s Retirement System and Employees’ Retirement System, both of Virginia’s Fairfax County with a population of about 1.1 million, have become America’s first pension funds to diversify into the crypto blockchain space through a new fund by assets management company Morgan Creek Capital.
The vast majority of the fund will be invested in blockchain related companies in return for equity. A small amount will be invested in top cryptos as well as in tokens that comply with the Securities Act 1933.
“We feel it is important to be opportunistic and are excited to participate in this emerging opportunity, due to the attractive asymmetric return profile that it represents,” said Katherine Molnar, the chief investment officer of the Fairfax County Police Officer’s Retirement System.
A number of other institutional investors participated in raising the $40 million, including a university endowment, a hospital system, an insurance company, and a private foundation.
It’s unclear how much of it was by the pension funds, with Anthony Pompliano, partner at Morgan Creek Capital, not responding in time for publishing. According to Bloomberg, Pompliano said:
“There’s a belief in the institutional world that if the industry will be around for a long time, it will be very valuable.
The smart money is not distracted by price but looks at the long-term trends, and believes they’re betting on innovation as a great way to deliver risk-mitigated returns.”
These are the world’s second pension funds to invest in cryptos. The first, as far as we know, is Canada’s biggest public pensions fund which raised $34 million last year with 90% of it going towards buying eth directly.
Since then, a number of university endowment funds and other institutional investors have entered the space in a small scale to test the waters to see whether cryptos can act as a diversifier in their huge investment portfolios.