Fairfax County Retirement Systems releases investment details about their recent involvement in the Morgan Creek’s blockchain fund, in order to subdue the fear about the Virginia municipality’s two pension funds venturing into the cryptocurrency ecosystem.
As reported yesterday, two pension funds have participated in the $40 million venture fund announced this week by Morgan Creek, marking first of its kind institutional investment in cryptocurrency. The executive director of Fairfax County Retirement Systems, Jeff Weiler wrote in an FAQ on the county’s website:
“Given that this technology is what has been used to create and run the cryptocurrency markets, you may be concerned that these are investments in bitcoin or other electronic currencies.”
Weiler also revealed the exact breakdown of Fairfax’s commitments, $10 million from the county employees’ pension fund, and $11 million from the police officers’ fund. In perspective, this represents just 0.3 percent of the employee fund’s assets and 0.8 percent of the police officer fund’s, as noted bt Weiler. He elaborated:
“These investments were deliberately sized to be a small portion of each system’s assets, given that the blockchain technology industry is still in its early stages.”
He further points out that a vast majority of the Morgan Creek Blockchain Opportunities Fund, at least 85 percent will be invested in blockchain technology firms.
“As such, this is very similar to other private equity investments made by Fairfax’s three retirement systems.”
This implies that not more than 15 percent of the fund will be allocated or invested into cryptocurrency and as of now none of it has been, Weiler added.
Weiler further described the pension funds’ due diligence on the investment, he states that the staff and board members of both funds traveled to Chapel Hill, N.C., where Morgan Creek is based in order to meet with the team there. The presentations made by Morgan Creek both funds’ boards at their monthly meetings discussed the proposed investments at length.
Weiler added:
“County attorneys and outside investment counsel spent a lot of time and energy ironing out the details of the investment contracts, to ensure that Fairfax County’s interests were assured.”
The note includes a blockchain technology overview, emphasizing over the potential applications that can go beyond cryptocurrency and include things such as identity verification and voting. Weiler concluded his note with a timeless reminder that all investments carry some risk, but assured the public that the pension funds had limited their downside, saying:
“Fairfax’s investment team determined that the expected returns from this investment were in line with the level of risk incurred. This also played a big part in how much was invested.”
Read more: Luxembourg Approves Blockchain Framework Bill Into Law
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