Australia’s Pension Fund Giant with $69 Billion AUM Is Open to Investing in Crypto
“As the (crypto) segment matures . . . there’s a likelihood that super funds seek out exposure,” said QIC’s head of currencies. Pension funds are still only interested in blockchain technology, with bitcoin “not an area of interest or focus.”
Queensland Investment Corporation (QIC), one of Australia’s largest pension funds, said it might make small investments in the cryptocurrency sector. The fund told the Financial Times that it is open to investing in cryptocurrencies in the future.
QIC manages A$92.4bn ($69 billion) of assets and is Australia’s fifth biggest pension fund.
According to the fund’s head of currencies, Stuart Simmons, early inflows into crypto are likely to be “more a trickle than a flood” due to uncertainty surrounding regulation.
“I don’t think there’s an inevitability about super funds and the institutional market investing in crypto, but as the segment matures . . . there’s a likelihood that super funds seek out exposure.”
Unlike family offices and private investor funds in the country, Australia’s “supers,” which pool together and manage people's retirement savings, hasn’t entered the crypto market until now.
Not Interested in Crypto Assets
This is yet another sign that retirement funds are now taking an interest in the crypto asset space despite increasing regulatory scrutiny. Recently, Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), with $300 billion in assets, led crypto lender Celsius Network’s $400 million equity funding round.
CDPQ CTO and executive vice-president Alexandre Synnett said in an interview that their inaugural investment in the crypto sector shows their “conviction” in blockchain technology, which will “change the way the financial services are interacting.”
Synnett, however, said the fund is only focused on making “opportunistic” investments in “diamond in the rough” early-stage companies and that this is just a “small diversification play,” with “absolutely” no plan to allocate funds directly into Bitcoin or other cryptos.
Similarly, Andrew Fisher, the head of the asset allocation at Sunsuper, a Queensland-based pension fund manager with $63 bln in AUM, said it is only interested in blockchain technology, and that bitcoin and other cryptos are “not an area of interest or focus.”
Regulatory Requirements Need Clarity
According to Simmons of QIC, there are still a number of uncertainties around cryptocurrencies, and the “operational infrastructure for institutional investing remains immature,” as well.
The largest investors will want more certainty on the regulatory front and more protections around “unquantifiable risks” such as fraud and market manipulation, he added.
But once regulatory requirements become clear, conservative investors will feel more comfortable making investments into the sector.
The entry of large banks and other financial institutions “highlights the perceived opportunity from the enablement of crypto investing,” said Simmons.
“As the framework continues to develop, super funds may eventually simply be responding to user demand by facilitating investment in crypto.”