Virginia Pension Fund Enters Crypto Lending Space to Enhance Returns

Fairfax County Retirements Systems is a Virginia pension fund worth $6.8 billion. It wants to expand its reach by entering the crypto lending marketplace to increase its returns. according Financial Times 

After the board approved the pension fund’s investment in yield farming, which allows investors to lend their digital assets out to crypto projects, this quest became reality. They get a guaranteed stream of income in exchange. 

Katherine Molnar (chief investment officer at the Fairfax County Police Officers Retirement System) pointed out:

“Some of the yields that you’re able to achieve in a yield farming strategy are really attractive because some of the people have stepped back from that space.”

Fairfax County Retirements Systems seems to be trying to fill the gap left by leading crypto lenders. Some have filed for bankruptcy, while others face uncertain futures. 

Three Arrows Capital (3AC), a cryptocurrency hedge-fund, filed for Chapter 15 bankruptcy in late October. The hedge fund’s woes were ignited by the collapse of LUNA-UST, given that it had a significant amount of exposure, Blockchain.News reported. Voyager Network and Celsius Network are other crypto lenders in trouble. 

Fairfax County Retirements Systems is committed to entering this sector because it has already placed $35 million each at VanEck’s new finance income fund and Parataxis Capital’s digital yield fund. This will allow investors to earn income by short-term lending arrangements using crypto assets.

Andrew Spellar is the investment chief at Fairfax County Employees.

“We started in venture capital and private equity. But once we got more comfortable in the space, we started to think a bit broader about how we might be able to use strategies in digital assets in other parts of the portfolio.”

Different crypto sectors continue to attract more players. Philcoin is a philanthropic crypto movement that recently launched a staking scheme that allows users to donate some of their earnings for charity. 

Source: Shutterstock

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