Virginia’s Fairfax County continues to be a distinguished public institutional investor within the cryptocurrency area and is ready to diversify its portfolio with a transfer into yield farming.
As beforehand reported, world asset managers VanEck introduced that the Fairfax Workers’ Retirement System and Police Retirement System will make investments $35 million into the agency’s crypto lending fund. It’s the newest funding transfer by the 2 county-run funds within the cryptocurrency area since their unique foray started in 2018.
Cointelegraph reached out to Andy Spellar, the chief funding officer of the Fairfax Workers’ Retirement System, to unpack their funding in VanEck’s crypto lending fund and the reasoning behind it.
Spellar confirmed that the Workers’ Retirement System (ERS) had dedicated $25 million to the fund whereas the Police Officers’ Retirement System (PORS) had pledged $10 million. The funding will happen between July and September this 12 months, relying on market situations.
An preliminary tranche has already been obtained by VanEck, with Spellar revealing that the ERS and PORS have invested $10 million and $5 million, respectively, for the month of July.
The transfer is actually excellent news for the cryptocurrency area, which is at the moment enduring a extreme downturn alongside typical inventory markets worldwide. The decentralized finance (DeFi) sector has arguably suffered probably the most, with the collapse of algorithmic stablecoin Terra inflicting a cascading impact all through the area.
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As the broader cryptocurrency ecosystem weathers the storm, funding schemes and funds like Fairfax County’s ERS and PORS proceed to see the worth provided by the sector, as Spellar instructed Cointelegraph:
“We’ve got appeared on the area as a diversifier with our credit score/excessive yield portfolios and notably efficiency durations just like the very short-term nature (1–3 months) of the positions.”
Spellar provided meals for thought on the present market situations, noting {that a} risk-adjusted foundation outlook means that cryptocurrency markets haven’t offered off any greater than excessive development sectors like tech, life sciences or authorities bonds:
“We’ve got not seen something to counter the long-term thesis that extra issues than much less might be digitized sooner or later, together with conventional belongings themselves. A lot of these markets shake out weak gamers and applied sciences and are total wholesome for markets and industries.”
The ERS and PORS funds have managed to fare properly amid broad market sell-offs attributable to their broadly diversified portfolios. Spellar famous that each are top-performing public funds throughout quick and long-term time domains and expects the newest quarter of the 12 months to be no totally different when it comes to efficiency.
Regardless of the primary six months of 2022 being one of many worst efficiency durations on document, Fairfax expects each programs to be prime decile performers over the interval. Spellar mentioned the digital asset section of their portfolio was very small, with the overwhelming majority made up of conventional enterprise capital fairness investments.
