Virginia Pension Fund Enters Crypto Lending Space to Enhance Returns

Fairfax County Retirements Systems, a $6.8 billion Virginia pension fund, seeks to expand its scope by entering the crypto lending market to boost its returns, according to Financial Times. 

This quest became a reality after the board of trustees gave the pension fund the greenlight to start investments in yield farming, whereby investors lend out their digital assets to crypto projects. In return, they attain a fixed stream of income. 

Katherine Molnar, the chief investment officer of the Fairfax County Police Officers Retirement System, pointed out:

“Some of the yields that you’re able to achieve in a yield farming strategy are really attractive because some of the people have stepped back from that space.”

It seems the Fairfax County Retirements Systems intends to fill the void left by various leading crypto lenders, with some filing for bankruptcy and others facing an uncertain future. 

For instance, cryptocurrency hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy last month. The hedge fund’s woes were ignited by the collapse of LUNA-UST, given that it had a significant amount of exposure, Blockchain.News reported. Other embattled crypto lenders include Voyager and Celsius Network. 

Fairfax County Retirements Systems is committed to entering this sector because it has already placed $35 million each at VanEck’s new finance income fund and Parataxis Capital’s digital yield fund. This move will be instrumental in providing investors with income through short-term lending arrangements with crypto assets.

Andrew Spellar, investment chief for Fairfax County Employees, noted:

“We started in venture capital and private equity. But once we got more comfortable in the space, we started to think a bit broader about how we might be able to use strategies in digital assets in other parts of the portfolio.”

Meanwhile, different crypto sectors continue attracting more players. For instance, Philcoin, a philanthropic blockchain movement, recently launched a staking mechanism enabling users to donate part of their earnings to charity. 

Image source: Shutterstock


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US Public Pension Fund Invests In Bitcoin For The First Time

  • A U.S. public pension fund has invested in bitcoin for the first time.
  • The Houston Firefighters’ Relief and Retirement Fund acquired an undisclosed amount of BTC through institutional bitcoin services provider NYDIG.
  • The investment “represents a watershed moment for bitcoin and its place in public pensions,” the global head of asset management at NYDIG said.

The pension fund for Houston’s firefighters, the Houston Firefighters’ Relief and Retirement Fund (HFRRF), announced today that it had purchased bitcoin for the defined benefit plan’s portfolio, making it the first announced investment in BTC by a public pension fund in the U.S.

“This investment represents a watershed moment for bitcoin and its place in public pensions,” said Nate Conrad, global head of asset management at NYDIG. “Fiduciaries are increasingly aware of how even a small allocation to digital assets can make a big impact over time, and they now have a partner in NYDIG who can help them make it happen.”

HFRRF acquired BTC and another cryptocurrency in a $25 million purchase facilitated by the institutional bitcoin services provider NYDIG, who will also provide custody services to the pension fund, Bloomberg reported. NYDIG has set up a private fund, which it will manage, to acquire and custody the assets on behalf of HFRRF.

“I see this as another tool to manage my risk,” Ajit Singh, the chief investment officer for the fund, told Bloomberg. “It has a positive expected return and it manages my risk. It has a low correlation to every other asset class.”

HFRRF plans to nourish the partnership with NYDIG going forward to allow its over 6,600 benefactors to leverage the suite of bitcoin-focused services provided by NYDIG’s full-stack platform. HFRRF benefactors include active and retired firefighters and survivors of firefighters.

The purchase marks the first-ever bitcoin investment by a public pension in the U.S., which has the potential to benefit HFRRF members significantly over the long run if BTC continues to appreciate against the dollar as it has for the entirety of its lifetime.


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