While crypto industry bigwigs incessantly talk a big game about the so-called “institutional herd,” few pillars of the legacy world have made a noticeable foray into this nascent ecosystem. Yet, innovators within the blockchain space are actively trying to amend this seeming issue.
Morgan Creek Digital, the crypto-centric facet of the broader Morgan Creek brand, scored a monumental win in this arena on Tuesday, as it revealed that it garnered the financial support of two U.S. pension funds for a newfangled venture. As Anthony “Pomp” Pompliano, a Facebook growth team member turned Morgan Creek Digital co-founder, would say, they’re “getting off zero.”
Virginian Funds Down The Crypto Red Pill
According to a report from Bloomberg, two pension plans in Fairfax County in Virginia invested millions in Morgan Creek’s next venture capital fund, which has already been launched with $40 million in investable capital. Anonymous insurance companies, a private foundation, and a university endowment in the U.S. also made assorted contributions, claims Pompliano, who has become a fervent advocate for institutional forays into the crypto asset class.
The original Bloomberg report didn’t reveal which pension funds had participated, but Forbes‘ crypto reporting team picked up where its competitor was lacking. Per the second report, the two funds that made financial allocations to Morgan Creek’s newest fund manage approximately $5.1 billion in assets for Virginia’s entire police force, along with other state-employed workers.
In a statement cited by the two business-focused media portals, Katherine Molnar of Fairfax’s police officer retirement plan remarked that blockchain technologies are being “applied in unique and compelling ways,” and has an “attractive asymmetric return profile.”
While this is the first that the public has heard of this fund, which remains unnamed, Morgan Creek has already put “a material amount” of the funds to good use. A number of notable investments that Morgan Creek’s team has made include Bakkt, Coinbase, Harbor, and Blockfi, just to name a few notable crypto upstarts.
Anthony “Pomp” Pompliano
Yet, there is still money left on the table. Pomp noted that a tenth of the amount originally invested could be allocated directly into cryptocurrencies, like Bitcoin and Ethereum. But, this hasn’t been fleshed out just yet. Regardless, Pompliano seems just about bullish on any instrument in this space:
“The smart money is not distracted by price but looks at the long-term trends, and believes they’re betting on innovation as a great way to deliver risk-mitigated returns.”
In a Twitter rant on the subject matter released Tuesday afternoon, he echoed his own thoughts. Staying true to his off the cuff, hypeman nature (might I remind you he worked growth at both Facebook and Snapchat), Pomp quipped that “the smart money is in the game in a big way,” adding that “the [crypto] virus is spreading.”
Anthony Pompliano: Every Pension Fund Should Buy Bitcoin
This ‘straight out of left field’ allocation from the Virginian pensions come just months after Pompliano took to his personal publication, Off The Chain, to tout the merits of a Bitcoin position in hedge funds and pension funds. According to the post, published in the midst of the holiday season, a potential solution to solve the impending pension crisis, whereas funds will likely default on some, if not most of their payments, is to simply buy cryptocurrencies. Bitcoin, for one, is a mostly non-correlated asset, with Pomp even calling it “the holy grail of any portfolio.”
Mike Novogratz of Galaxy Digital echoed Pomp’s statement, recently taking to Twitter to write that he doesn’t understand why “big macro funds” don’t even have a 1% position in cryptocurrency.
But, if past bouts of FOMO (the fear of missing out) are of any indication, there’s a good chance that more institutions will join the crypto fray soon enough, especially with firms like Morgan Creek that push the needle in this subsector.