The Retail Employees Superannuation Trust (REST) could become the first Australian retirement fund to invest in digital assets. At the fund’s annual meeting, CIO Andrew Lill said that “over the course of the last 12 months, we would see cryptocurrency as becoming an investible long-term part of our investment offering. We are doing a lot of work in this area.”
Lill was asked by an audience member at the meeting whether he sees cryptocurrencies becoming part of REST’s investing approach.
“The answer to your question is with a cautious yes, we do see the future for REST investing in cryptocurrency,” he said, adding that “we do think that potentially in an era of inflation, it could be a potentially good place to invest.”
He said the challenge is that he wants more to see more certainty on platform security and ensure that regulation allows a tax-advantaged investment plan to invest “carefully and cautiously” in crypto.
“I would say that it’s still a very volatile investment,” Lill said. “So any allocation exposure we make to cryptocurrency is likely to be as part of our diversified portfolio inside as initially a fairly small allocation that may over time build.”
Despite his caution, Lill added that “we see it’s a very interesting and important part of our portfolio going into the future.” He also called crypto a “disruptive technology that can really drive payments and processing forward” and said “it can be a stable source of value.”
However, Lill appeared to backtrack a bit after the meeting when he issued a statement that said no firm decision has been made regarding investing in crypto.
“While we are certainly considering cryptocurrencies as a way to diversify our members’ retirement savings, we will not be investing in the immediate future,” the statement said. “We are currently conducting extensive research into the asset class prior to making any decisions. We are also considering the security and regulatory aspects of investing in this class.”
Pension funds, which tend to invest conservatively due to their long time horizons, have been cautious to venture into the speculative waters of cryptocurrencies. This summer, New Jersey’s pension fund invested a little over $7 million in Bitcoin mining companies Riot Blockchain and Marathon Digital Holdings. And in October, the Houston Firefighters’ Relief and Retirement Fund announced that it had invested $25 million in Bitcoin and Ether for the defined benefit (DB) plan’s portfolio.
The Fairfax County Police Officers Retirement System and Fairfax County Employees’ Retirement System in Virginia were some of the first pension funds to invest in crypto-related assets back in 2018 when they began investing in the Morgan Creek Blockchain Opportunities Fund.
The Fairfax County Employees’ Retirement System has committed to a $10 million investment, which represents 0.3% of the fund’s total assets, while the Police Officers Retirement System has committed an investment of $11 million, which represents 0.8% of its total assets.Related Stories: