New Crypto Pensions Deal Shows Institutionals 'Are Already Here'
Cryptocurrency adoption just got another boost from institutional investors.
Police officers and other state employees in Virginia’s Fairfax County will be looking forward to retirement with potential dividends from Bitcoin thanks to a new USD 40 million crypto venture fund by digital asset management firm Morgan Creek Digital.
Anthony “The Pomp” Pompliano, co-founder and partner at Morgan Creek Digital, announced:
This morning our team at Morgan Creek Digital announced a new $40 million crypto venture fund anchored by two public pensions.— Pomp 🌪 (@APompliano) February 12, 2019
The institutions aren’t coming.
They’re already here. 🚀
Later, he added that "a ton of people worked their asses off to make this happen and it took some incredibly forward thinking capital allocators to have the courage to be the first."
“We are proud to partner with these investment professionals who have shown an ability to be forward-thinking and innovative,” said Morgan Creek partner and the fund’s co-founder Mark Yusko in a statement.
According to the announcement, two separate pension funds that collectively manage USD 1.2 billion in assets for the state’s police force and other employees are backing the fund: Fairfax County, Virginia’s Police Officer’s Retirement System and Employees’ Retirement System.
Katherine Molnar, chief investment officer of Fairfax County’s police officer’s retirement system, said in a statement, “We feel it is important to be opportunistic and are excited to participate in this emerging opportunity.”
Morgan Creek’s new fund will primarily make seed investments in equity, Pompliano told CoinDesk, though in certain limited cases it will also invest in token-based projects that don’t create equity opportunities but do have cash flow. It will also hold a small amount of key cryptocurrencies. He added that public pensions are facing great struggles meeting their obligations, which led them to look beyond traditional investments such as stocks and bonds in order to catch up. This has led Morgan Creek to pitch cryptocurrencies and the blockchain industry as a possible solution.
Given that the global pension deficit is estimated to reach USD 400 trillion by 2050, people expecting to retire in the coming decades have plenty of reason to be worried. However, even though solving the pensions crisis is likely to require considerable societal, economic and political shifts, blockchain technology could provide a way of easing many of the factors that make the crisis worse, as reported by Cryptonews.com.
To combat potential fraud concerns, Pompliano worked with the pension funds to answer questions they had about potential risks, and how crypto investments differed from traditional assets, Forbes reported. Going forward, he said the blockchain fund will continue to invest in cryptocurrencies and companies building infrastructures for a wide range of blockchain products.
As reported by Cryptonews.com, despite the bear market, crypto and blockchain will continue to appeal to institutional investors through 2019 and beyond, while asset managers most interested in new models for the tokenization and management of traditional securities and other assets.
Meanwhile, Morgan Creek Digital is also known for unusual self-promotion measures. Late last year, Morgan Creek bet USD 1 million that cryptocurrency assets will outperform the S&P 500, an American stock market index based on the market capitalizations of 500 large companies, during the next 10 years. Moreover, in January, Morgan Creek Digital co-founder Jason A. Williams announced that he's selling his Lamborghini to buy Bitcoin - and accepting offers in BTC.