A new announcement made a couple of days ago, February 12th, by the Morgan Creek Digital revealed a $40 million crypto venture fund, which was anchored by two public pensions. The two public pensions are the Police Officer’s Retirement System and Employee’s Retirement System, both of which are located in Fairfax County, Virginia.
The fund has attracted a lot of attention, and it already has a number of investors, including a hospital system, a private foundation, but also a university endowment, and an insurance firm.
Institutions marching to crypto
Large pension funds have been considering cryptocurrencies as an investment strategy in the past, with one California-based public pension even considering this possibility back in 2016. However, cryptocurrencies are still at a very early stage, which is why many hesitated to make a move.
While the funds are located in the same area, they are still completely separate, and each of them has its own investment committee. The police pension fund contains around $1.45 billion in assets, and the government employees fund has around $4.25 billion. Both funds are quite large, which is expected to bring closer attention to other public pensions and potential interest in blockchain investing.
The goals of the fund
At first, the new fund will focus on equity investments, with a few potential investments in token-based projects that see a certain amount of cash flow, while they abide by the US SEC regulations. Also, the small portion of the fund will be dedicated to holding small amounts of certain cryptocurrencies.
Morgan Creek decided to make this move due to the public pensions’ desire to diversify their investment portfolio and go beyond investing in bonds and stocks. As the blockchain technology already attracted attention due to its unique applications in numerous industries, the public pensions saw it as an interesting opportunity.
The fund attracted the attention of many in the crypto and blockchain industries, and it already managed to close several deals with established firms, including Bakkt, Good Money, Coinbase, BlockFi, Harbor, and others.
While there are real opportunities for public pensions willing to take the crypto and blockchain route, it was difficult finding those who would be willing to make such a move at this point. Many issues in the crypto world still remain unresolved. However, the new development shows that the institutional investors are not only interested in coming to the crypto space, but that they have already arrived.
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