Two American public sector pension funds have reportedly backed a new cryptocurrency industry venture capital fund with a large tranche of a combined $40 million investment. The deal is being hailed as a show of confidence in the field from some of the most conservative types of investment managers.
The Morgan Creek Blockchain Opportunities Fund
Anthony Pompliano, Partner at Morgan Creek Digital, the asset management firm backed by multi-billion dollar investment advisor Morgan Creek Capital Management, has announced a new $40 million crypto venture fund anchored by two public pensions. In typically defiant terms, ‘Pomp’ as he’s known on crypto Twitter declared: “The institutions aren’t coming. They’re already here.”
The two funds providing the main backing for the Morgan Creek Blockchain Opportunities Fund are said to be the Fairfax County Police and the Fairfax County Employees’ pension plans. Other participants reportedly include an insurance company, a hospital system, a university endowment fund and a private foundation.
The new fund is said to be structured like a traditional venture capital fund and will mainly invest directly in the equity of companies involved in the digital assets industry. However, the fund will also reportedly hold a small portion of its capital in cryptocurrencies. Morgan Creek has already made investments in companies such as Bakkt, Blockfi, Coinbase, Realblocks, Harbor, Open Finance Network, Cityblock Capital, Namebase, Good Money, and Digital Assets Data.
Every Pension Fund Should Buy Bitcoin
Morgan Creek Digital has been working on opening up the cryptocurrency market to pension funds for a while now. In August 2018 it launched the Digital Asset Index Fund, which was designed to provide endowments, foundations, pensions, wealthy families, and sovereign wealth funds access to broad-based crypto investment exposure.
In December, Pompliano wrote in a Medium post that “every pension fund should buy Bitcoin.” Explaining how this could be made to happen, he wrote: “It will take time for pension funds to get comfortable with investing in Bitcoin. We need to educate multiple stakeholders and demystify this nascent industry. When one makes the decision, it will create a cascading effect that leads to hundreds of them jumping in. Bitcoin has the potential to save us from the current pension crisis. We just need one or two courageous individuals to make the first move.”
What do you think this investment by pension funds means for the cryptocurrency ecosystem? Share your thoughts in the comments section below.
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