First US Pension Funds Take Plunge on Crypto Investing

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First US Pension Funds Take Plunge on Crypto Investing

Morgan Creek Digital has successfully sealed the funding from two of the three benefit plans from the Fairfax County Retirement Systems. With this funding, the company has become the first one in the crypto asset universe to make an investment in digital assets.

Citing a statement from the company, Bloomberg on 12th Feb reported that the company has been able to secure $40 million in funding from investors that include two major pension funds. In addition to this, Virginia is reported to be the anchor investors in the funding.

Anthony Pompliano, the founder of Morgan Creek Digital while highlighting others investors during the funding round mentioned that other investors that participated in the funding included a university endowment, an insurance company, and a private foundation. When asked to provide further details about the investors, Pompliano refused to provide other details regarding the same.

Due to lack of regulations and rising cases of market manipulations in the crypto market, many institutional investors that were earlier attracted by the potential out-sized gains and its volatility, are now backing off. The Virginia pension funds, however, have been joined by some of the famous institutions including the Yale University, which invested in a digital assets fund last year. Yale University which has shown a positive approach towards the crypto market is the second-largest endowment in higher education.

Pompliano, in his statement, discussed three separate defined benefit plans that are managed by Fairfax County Retirement Systems. And out of these three benefit plans, two of them invested in the Morgan Creek Digital fund, mentioned Pompliano.

Katherine Molnar, the chief investment officer of one of the funds, said in a statement that blockchain technology, which was first developed to record the movement of Bitcoin, is an “emerging opportunity” that offers an “attractive asymmetric return profile.’’

Pompliano also discussed that his new fund is constructed similar to traditional venture capital fund that will invest in the equity of companies in the digital assets industry and blockchain. He further added that a small percentage of the value of the fund will be kept in liquid cryptocurrencies such as Bitcoin.

During a phone interview, Pompliano mentioned “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.’’