Australian Pension Fund with $69B in AUM Eyes Crypto Investment

As the global interest in cryptocurrencies continues to gain momentum, Queensland Investment Corporation (QIC), Australia’s fifth-largest pension funds manager with A$92.4 billion ($69bn) of assets under management (AUM), has disclosed that it may delve into such investments in the future.

Stuart Simmons, QIC’s head of currencies, told the Financial Times in an interview today.

Regulatory Uncertainty Scares Australian “Super”

Based on the massive growth of the crypto market in recent times, several institutional and family offices had taken early positions by investing in the asset class.

However, Australia’s so-called super funds that manage the retirement savings of millions of people have been skeptical about cryptocurrency investments.

Simmons noted that this skepticism about crypto assets on the part of the supers is a result of uncertainty about how governments globally will intervene in the rapidly growing industry.

“Right now there are a number of uncertainties, and the operational infrastructure for institutional investing remains immature,” Simmons said.

Investors’ Protection to Drive Investments

For the QIC’s head of currencies, before most large investors would invest in cryptocurrencies, they would require regulatory certainty relating to their protection from asset theft and market manipulation.

With this protection guaranteed, Simmons said: “I don’t think there’s an inevitability about super funds and the institutional market investing in crypto, but as the segment matures . . . there’s a likelihood that super funds seek out exposure.”

North American Pension Managers Loosen Up

While several conservative pension fund managers have chosen to stay away from cryptocurrency investments, few, especially in North America, have gone ahead to gain exposure to the asset class.

In the United States, two pension funds – Fairfax County Police Officers Retirement System and Fairfax County Employees’ Retirement System, made a direct bet on the asset class via their investment in Parataxis Capital Management.

Similarly, Caisse de dépôt et placement du Québec (CDPQ), Canada’s second-largest pension fund, was among the main investors that participated in the recently concluded $400 million funding round for popular cryptocurrency lending firm Celsius Network.

However, European pension fund managers do not seem enthusiastic about cryptocurrency investments due to the regulatory risks involved with the investment yet.

Simmons reiterated that once the crypto ecosystem evolves from its current “Wild West market” to a more organized one, conservative investors would feel comfortable investing.

Publication date: 
10/15/2021 - 19:15

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