Probably in an attempt to quell fears about the Virginia municipality’s two pension funds taking on exposure to cryptocurrency, Fairfax County Retirement Systems has recently released details about its investment in a blockchain fund.
Jeff Weiler, the retirement systems’ executive director, wrote in an FAQ on the county’s website said, “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 went on to explain that this will not be the case. As per reports, the two pension funds are anchor investors in the $40 million venture fund announced this week by Morgan Creek, in what seems to be the first such bets on the sector placed by similar institutions.
In his FAQ, Weiler also spoke about the exact breakdown of Fairfax’s commitments: $10 million from the county employees’ pension fund, and $11 million from the police officers’ fund. Basically, these figures represent just 0.3 percent of the employee fund’s assets and 0.8 percent of the police officer funds. Weiler also 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.”
Additionally, the vast majority of at least 85 percent of the Morgan Creek Blockchain Opportunities Fund will be utilized to invest in blockchain technology firms. Weiler clarified that this endeavor is very similar to other private equity investments made by Fairfax’s three retirement systems.
Weiler then went on to describe the pension funds’ due diligence on the investment, saying that the staff and board members of both funds had traveled to Chapel Hill, N.C., to meet with the team of Morgan Creek there. Moreover, Morgan Creek made presentations to both funds’ boards at their monthly meetings.
Weiler ended his note with a reminder that all investments are risky to some extent but assured the public that the pension funds had limited their downside. He said,
“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.”