Virginia’s Fairfax County remains a prominent public institutional investor in the cryptocurrency space and will diversify its portfolio with a move into yield farming.
As previously reported, global wealth manager VanEck announced that Fairfax Employees’ Retirement System and Police Retirement System will invest $35 million in the company’s crypto loan fund. It’s the latest investment move by the two county-led funds in the cryptocurrency space since they began their original foray in 2018.
Cointelegraph reached out to Andy Spellar, the chief investment officer of Fairfax Employees’ Retirement System, to lay out his investment in VanEck’s crypto loan fund and why.
Spellar confirmed that the Employees’ Retirement System (ERS) had committed $25 million to the fund, while the Police Officers’ Retirement System (PORS) had committed $10 million. The investment will take place between July and September of this year, depending on the market situation.
VanEck has already received a first tranche, with Spellar revealing that the ERS and the PORS invested $10m and $5m respectively for the month of July.
The move is certainly good news for the cryptocurrency space, which is currently going through a severe downturn alongside conventional stock markets around the world. The decentralized finance (DeFi) sector has arguably suffered the most, with the collapse of algorithmic stablecoin Terra causing a cascading effect across the space.
Related: A survey shows that 55% of crypto investors chose HODL as Bitcoin and altcoin prices plummeted
As the broader cryptocurrency ecosystem weathers the storm, investment plans and funds like Fairfax County’s ERS and PORS continue to see the value the sector offers, as Spellar told Cointelegraph:
“We have looked at space as a diversification factor for our credit/high yield portfolios and in particular periods of performance such as the very short-term nature (1-3 months) of the positions.”
Spellar offered food for thought on current market conditions, noting that a risk-adjusted baseline outlook suggests cryptocurrency markets have not sold off any more than high-growth sectors such as tech, life sciences, or government bonds:
“We have seen nothing against the longstanding thesis that more will be digitized in the future, including traditional assets themselves. These types of markets crowd out weak players and technologies and are overall healthy for markets and industries.”
The ERS and PORS funds held up well amid broad market sell-offs due to their broadly diversified portfolios. Spellar noted that both public funds are the best performers over the short- and long-term timeframe, and expects the final quarter of the year to be no different in terms of performance.
Although the first six months of 2022 was one of the worst performing periods on record, Fairfax expects both systems to be top-decile performers over the period. Spellar said the digital asset segment of her portfolio is very small, with the vast majority made up of traditional venture capital investments.
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