One institutional investor, Katherine Molnar, chief funding officer of the $1.9 billion Fairfax County Police Officers Retirement System in northern Virginia, isn’t any stranger to digital property.
In 2018, the police fund, together with a sister pension fund, the $5.1 billion Fairfax County Staff’ Retirement System, grew to become the first known public pension funds to commit to a dedicated fund that invests primarily in blockchain technology firms — the Morgan Creek Blockchain Alternatives Fund, managed by Morgan Creek Digital Belongings, a subsidiary of Chapel Hill, N.C.-based Morgan Creek Capital Administration LLC. The staff fund dedicated $10 million and the police fund dedicated $11 million to the Morgan Creek fund in 2018.
Since then, the 2 Fairfax funds have made 5 extra digital asset-focused allocations, together with two in latest months.
The staff fund invested $32 million in October and the police fund invested $18 million in November to Parataxis Capital, a multistrategy hedge fund targeted on the digital property sector. The 2 Fairfax funds additionally entered right into a revenue-sharing settlement with Parataxis Capital, although Ms. Molnar declined to supply specifics. “We had been pleased to take a position as a restricted companion, however then we had been notably pleased after we may negotiate a income share with them and be a strategic companion to them,” she mentioned.
In January, the workers fund dedicated $40 million and the police fund dedicated $20 million to Polychain Ventures III, a enterprise capital fund managed by Polychain Capital targeted on digital property.
Ms. Molnar mentioned her pension fund has seen stable returns from the digital property to this point and is bullish on its future. “We simply suppose that there’s going to be an amazing quantity of development within the digital asset house so we expect that over time, many property, and never simply property, however many issues will turn into digitized,” Ms. Molnar mentioned. “So it’s not simply artworks or NFTs, however you’ll be capable of purchase digital or fractional shares of many alternative issues, and it’s not simply equities and bonds and typical monetary property, it’ll be something and all the things.”
She mentioned her board will take into account two extra digital asset funds at its Could 11 assembly, although she declined to supply specifics forward of time. She mentioned the pension fund can’t share particular returns from digital asset funds.
Ms. Molnar mentioned as a result of her pension fund isn’t investing immediately in a cryptocurrency similar to bitcoin, it avoids the day-to-day volatility whereas getting publicity to the asset class.