A $6.8 billion pension fund will invest in the crypto lending market

A $6.8 billion pension fund will invest in the crypto lending market
Source: Adobe/Yul

Indicating that some major financial players have not been scared off crypto-assets by the current market downturn, the Fairfax County Pension Systemsa US pension fund with assets totaling $6.8 billion, has disclosed that it is looking to invest in crypto lending markets to boost its returns.

“Some of the returns you are able to get in a agricultural yield strategy are really attractive because some people have pulled out of that space,” Katherine Molnar, Chief Investment Officer (CIO) of the Fairfax County Police Officers Retirement System, Told the Financial Times.

The fund’s CIO said that “for those who are still willing to provide liquidity, decent profit seekers, they are actually in a position to earn more attractive returns at the moment.”

The pension fund recently injected $35 million each with the Paratax capitalthe Digital Yield Fund and VanEckThe new Financial Income Fund, which is to generate income for investors through short-term loan agreements with crypto asset entities.

The latest development does not mark the fund’s first venture into blockchain-related investments. Its two subsidiaries, the $5 billion Fairfax County Employees Retirement System and the $1.8 billion Fairfax County Police Officers Retirement System, first invested $10 million and $11 million, respectively, in the Morgan Creek Blockchain Opportunities Fund in 2019. The decision was made about a year after their executives first heard about cryptoassets and the opportunities they present for investors.

“We were at a conference and we overheard an academic who teaches a course on the subject speak,” according to Molnar. “We were really intrigued by the promise of the technology and its products.”

“We are still doomed in our original thesis,” she reportedly said. “Things will bounce back and the stronger technologies will likely survive.”

Pension funds represent some of the traditional financial institutions that have an increasingly friendly approach to crypto investments. A June 2022 Report by the international board PwC indicates that, despite the current market volatility, an increasing number of US hedge funds are investing in crypto-assets. Of the traditional hedge funds surveyed, some 38% were investing in digital assets that month, up from 21% a year earlier.
Learn more:
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