Pension Funds Double Crypto Asset Exposure in Morgan Creek's Fund to 1%

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Morgan Creek Digital now takes up around 1 percent of the assets of two Fairfax Retirement System pension funds - an investment which has more than doubled since taking their first position in the fund that closed in February.

Two of the three pension funds under the system from Fairfax County, Virginia, the Police Officer's Retirement System and Employees' Retirement System, invested $55 million in Morgan Creek's second fund in October.

The new allocation came after seeing good preliminary results from the first fund, in part because of the performance of crypto, which makes up 15 percent of the Morgan Creek's investments; the majority of the fund's positions are in blockchain-related infrastructure companies.

"The final close for fund one was only in February of this year, and it is a short time frame admittedly," Katherine Molnar, chief investment officer of the police officer's fund, told CoinDesk.

"It's gone well and part of that is because of Morgan Creek's decision for how they've timed buying bitcoin. The liquid part of the fund has done quite well based on how they have timed ramping that up in the portfolio."

The police officer's pension fund contributed $22 million of the investment while the county employees' fund put up $33 million.

Molnar said $50 million of the investment went to the second fund raise while $5 million was a separate co-investment in a specific undisclosed project under Morgan Creek.

The Morgan Creek fund was characterized as a private equity venture capital fund, and a replacement for a small capitalization US equities fund in their portfolio - one of the higher return and higher risk parts of pension fund investing.

While the crypto part of the Morgan Creek Digital fund is performing well, the pension fund's CIOs expressed the most interest in the blockchain side of Morgan Creek, which makes up 85 percent of the fund.

As pension funds suffer from low interest rates, technology venture capital funds become more attractive to funds trying to meet their return targets, Spellar added.

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