Two U.S. Pensions Invest In $40 Million Morgan Creek Crypto Venture Fund


Two pension funds in Virginia’s Fairfax County have joined a $40 million investment fund overseen by Morgan Creek Capital, becoming the first public pension funds to do so.

In essence, it means the county’s police officers and other employees could be headed for retirement dividends from bitcoin- a remote possibility up until now.

The county’s Police Officer’s Retirement System and Employees’ Retirement System have invested in the Morgan Creek Blockchain Opportunities Fund, which currently backs some of the top startups in crypto and looks at investing in crypto with services targeted at institutional clients.

Announced on Tuesday, the new venture fund has also attracted investments from a university endowment, an insurance company, a hospital system, and a private foundation.

The Fairfax County Police Officer’s Retirement System’s chief investment officer Kathrine Molner explained that they joined Morgan Creek’s fund because it presented an “attractive asymmetric return profile” which was an opportunity they want to explore.

The two pension funds collectively manage roughly $5.7 billion in assets, with the police fund accounting for $1.45 billion while that of government employees manages about $4.25 billion in assets.

Although 2018 left many cryptocurrencies bleeding into the abyss, the move by these funds is an indication that blockchain technology’s potential is attractive and that firms may be looking to capitalize on the bear market.

Attracting funds with assets the size of these two also helps in highlighting the enormous potential blockchain and crypto has when such entities take positions, even if they use only a tiny portion of their AUM (assets under management).

The trend has been picking up momentum, beginning as early as 2016 when the California Public Employees Retirement System (CalPERS) was reported to have considered investing in blockchain opportunities.

Although it is still early days in terms of seeing an influx by pension funds, the appeal indeed is there.

Other than seed investments in equity, the new fund will also involve investing in token-based projects as well as small holdings in major cryptocurrencies.

According to Antony Pompliano, a partner at Morgan Creek Capital, public pensions are looking to diversify investments beyond the traditional stock or bonds to meet increasingly stringent obligations.

Pompliano also added that the fund gives pensions “great exposure” not only to true innovation but also to several top risk-mitigated opportunities.

Meanwhile, Binance CEO Changpeng Zhao commented on the development by referring to the fund (and the investment of the two pension funds) as a “big step for crypto.”

According to Mark Yusko, another Morgan Creek partner, it wasn’t easy to find pension executives who were willing to be the first to venture into crypto-related funds. Nonetheless, the move by the two Virginia public pension funds could open the gates for more to join.

Apart from Coinbase and Bakkt, the Morgan Creek fund has already made investment deals with leading startups within the nascent crypto industry. They include BlockFi, TrustToken, and Harbor, among many others.

Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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