Investments in Blockchain Fund Total $21 Million Through Fairfax County Retirement Systems
Cryptocurrency is becoming less of just a trading option, giving consumers the ability to store value through different types of assets. Recent, the Fairfax County Retirement Systems decided to invest in a blockchain fund, but the decision was met with worry and concerns from their customers.
To help soothe some of those fears, executive director Jeff Weiler provided a FAQ section on the county’s website to help clear up some of the concerns.
Weiler wrote, “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.”
However, he assures that this is not the case. Morgan Creek announced the $40 million venture fund, of which the two pension funds of Fairfax are considered anchor investors. Speaking to CoinDesk in an interview, Anthony Pompliano of Morgan Creek Capital said, “As far as we know, nobody has raised money from a public pension.”
Katherine Molnar, who operates as the chief investment officer for the retirement system, spoke in a press release on the matter, adding,
“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity, due to the attractive asymmetric return profile that it represents.”
The FAQ continues, explaining that $10 million (0.3% of the fund’s assets) was contributed from the employee’s pension fund, while $11 million (0.8% of the fund’s assets) came from the police officers’ fund. Weiler added,
“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.”
Most of the Morgan Creek Blockchain Opportunities Fund will be focused on the investment in blockchain technology firms, according to Weiler. He added, “As such, this is very similar to other private equity investments made by Fairfax’s three retirement systems.”
A maximum of 15% of the fund is planned to be contributed, though nothing has been added yet.
To further discuss the potential concerns of customers, Weiler spoke on the work that the retirement system has already put in to making sure it was the right decision. Representatives of both funds, which included staff and board members, decided to embark on a journey to Morgan Creek’s main base.
They attended presentations put together by Morgan Creek to ensure that the representatives understood exactly how the funds would be impacts with the world from the blockchain platform.
Weiler noted, “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.”
He added that blockchain has uses outside of cryptocurrency, which could be applied to processes like identity verification and voting.
In a final comment to the group of members, Weiler tried to instill confidence within the new opportunity, and to assure pensioners that the retirement system had done as much as possible to preserve their funds. He added,
“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.”