$5.5 Billion AUM Pension Fund Buys Bitcoin and Ether Because They Can’t “Ignore” It Anymore
Houston firefighters’ pension fund is the latest to join the cryptocurrency scene.
The Houston Firefighters' Relief and Retirement Fund has announced that it has bought $25 million worth of Bitcoin and Ether for a defined-benefit plan’s portfolio with the help of NYDIG, a subsidiary of asset manager Stone Ridge.
The Fund’s chief investment officer Ajit Singh said the investment expressed their belief in “the disruptive potential” of cryptocurrencies.
“We are excited to take this first step forward into the world of digital assets.”
The fund with $5.5 billion in assets under management said that this crypto investment had been years in the making. This move also came as Bitcoin price hit a record high above $67,000 earlier in the week, and Ether nearly hit its $4,380 ATH following the debut of the first US Bitcoin exchange-traded fund (ETF).
However, the Houston Firefighters' Relief and Retirement Fund prefers directly buying crypto assets than taking on the risk associated with futures-related investments.
“We didn’t want to get the synthetic exposure.” “We decided to go directly to the token. As more and more institutional adoptions happen, there will be more and more dynamics that develop for supply and demand. And having physical assets — actual tokens — gives us in the future the possibility of income generation potential.”
NYDIG's global head of asset management, Nat Conrad, said in a statement that this investment “represents a watershed moment for bitcoin and its place in public pensions.”
Previously two Virginia pension funds bought crypto assets two years ago and recently said that they are planning to expand their investments by another $50 million.
“I see this as another tool to manage my risk.” “It has a positive expected return and it manages my risk. It has a low correlation to every other asset class.”
The fund handles retirement benefits for over 6,600 active and retired firefighters and family beneficiaries. For the past 17 years, active firefighters have contributed 9% of their salary to the fund, with the city of Houston contributing at least twice that amount.
“We have been studying this as an asset class to add to our investment portfolio for quite some time; we were watching it, we were analyzing it.” “It became an asset class we could not ignore anymore.”