In October, the Police Officers' Pension Fund and the Fairfax Employees' Pension Fund invested $55 million in the second Morgan Creek fund. Their initial investment was $21 million.
According to the publication, the decision to increase the investment was made against the background of good preliminary results of the first fund, partly related to the rise in the exchange rate of cryptocurrencies, which account for 15% in the fund Morgan Creek, most of its assets are concentrated in companies engaged in the development of infrastructure solutions using blockchain.
"Asset collection for the first fund closed only in February. It's a short period of time," said Catherine Molnar, investment director of the Police Officers Pension Fund. - The results were good, partly due to Morgan Creek's decision on when to buy Bitcoin.
The Police Officers' Fund has invested $22 million, and the remaining $33 million has been provided by the Employees' Pension Fund, which corresponds to 1.5% and 0.8% under each of them. These funds usually allocate about 2% of their assets to new investments.
Molnar explained that $50 million was invested directly in the second fund, while another $5 million went to some unnamed project Morgan Creek. This time, the decision was made without much effort on the part of Morgan Creek to convince investors.
"We did not hold extensive additional discussions. In general, people are satisfied with the initial indicators. On the legal side, the process was much easier because the lawyers did a good job with the first contract," she added.
Although the liquid part of the Morgan Creek fund has pleased investors with its performance, they admit that they are more interested in investing in blockchain.
"Every time you go to buy a property and refinance assets, you have to pay a small premium to someone who checks that it's not mortgaged. If ownership is digitized, this small premium is not required," said Andy Spellar, Director of the Employees' Pension Fund.
Against the backdrop of the typically low return on investment of pension funds, offers from venture capital firms in the technology industry are becoming increasingly attractive to them as they help them achieve their goals, Spellar added.
"This problem here is relevant for everyone. The level of interest is an important component of total income over time," he said.
Despite the high potential return on investment, both funds still avoid enterprises that work exclusively with cryptocurrencies.
"We don't invest in cryptocurrencies, but we have a small outlet to them. So far, they have shown no correlation with other asset classes. To tell the truth, they are at a very early stage of formation," Spellar said.
Spellar is inclined to believe that any advanced technology can act as a hedge against the risks of traditional investments.
"We are considering breakthrough innovations, everything that can negatively correlate with what we already have. If we have sufficient investments in banks, we can hedge against their monolithic and slow processes," he concluded.