Pension Fund Looks at Crypto Yield Farming, Already Invested $70M

Pension fund looks at crypto yield farming, while already having invested $70 million of its own money into the venture.

Fairfax County Retirement Systems, a pension fund based in Virginia, has expressed interest in the bitcoin loan market despite the recent market dip as it looks for ways to increase earnings.

Pension Funds Have Already Infused Crypto Yield Funds with $70 Million

The Fairfax County Retirement Systems, which include the Fairfax County Employee Retirement System and the Fairfax County Police Officers Retirement System, reportedly received permission from the board of trustees to invest pension fund money in yield farming on Thursday, August 4, 2022, according to the Financial Times.

The Fairfax County Retirement Systems, meanwhile, took a step further to participate in cryptocurrency yield farming when it recently invested $35 million in each of Parataxis Capital Management’s and VanEck’s digital yield funds. Both initiatives produce returns for the liquidity provided by investors.

Katherine Molnar, the chief investment officer (CIO) of the $1.8 billion Fairfax County Police Officer Retirement Systems, said in an interview with the Financial Times:

“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. For those that are still willing to provide liquidity, decent profit seekers, they’re actually able to earn more attractive yields at the moment.”

The current issues faced by platforms that provide crypto loan services, however, do not appear to be deterring pension funds. Significant businesses including Celsius, Voyager Digital, and Three Arrows Capital (3AC) are all fighting to survive and have all declared bankruptcy.

In July, the founders of the hedge fund were subpoenaed with permission from the 3AC liquidators. Voyager and Celsius ceased withdrawal; the latter was also involved in legal disputes and recently disclosed a data breach involving its clients.

Maybe this pension fund looks at crypto yield farming and sees something that the experts do not. Whatever the outcome, we will be following this investment and its success.

Not New to the Cryptocurrency Industry

It’s interesting to note that the pension administrators have previously entered the bitcoin space. Both the $5 billion Fairfax County Employee Retirement System and the $11 million Fairfax County Police Officers Retirement System contributed to the Morgan Creek Blockchain Opportunities Fund in 2019.

Before getting involved in the developing industry, both pension funds said that proper diligence had been done. The funds have since added seven digital allocations for hedge funds and private equity, with yield farming being the most recent.

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