VanEck Receives $35M Investment Fund from Fairfax’s Retirement System

VanEck has disclosed it has received $35 million in the first tranche of investment from two retirement systems in Fairfax county. 

The retirement systems are the Police Officers Retirement System and Employees Retirement System of Fairfax County, Virginia.

The two retirement systems in Fairfax county committed the funds to the VanEck New Finance Income Fund, LP. Despite its volatility, the investment proves the advancement of institutional adoption of the digital asset.

The pension administrators seem experienced with the crypto space as this is not its first foray into the space. As part of its acceptance of the nascent asset class, Fairfax county began investing in several crypto firms in 2018.

Fairfax had previously committed $21 million from its retirement system into Morgan Creek’s Blockchain Opportunities Fund (MCBOF).

According to an update on the MCBOF investment by Jeff Weiler, Fairfax’s retirement system’s executive director; all investment involves risk and the expected returns were in line with the level of risk incurred.

While Fairfax County still observes the cryptosphere, its capital commitment in the investment is less than 1% of its total asset under management.

VanEck’s New Finance Income Fund aims to offer an outlet for investors to generate income from digital assets without the price risk. It achieves this through short-term lending arrangements with crypto firms with a simplified approach.

Launched in December 2021, the fund provides lesser volatility compared to direct exposure to the digital asset. The Fund is only available to accredited investors in the U.S.

Investment opportunities in digital assets

With the continued adoption of digital assets, several institutions have turned to nascent assets as an investment opportunity.

In October 2021, The Ontario Teachers’ Pension Fund committed about $50 million in a fundraising round for FTX trading Ltd. The crypto exchange raised over $420 million from 69 investors in the said round.

Similarly in October 2021, the Caisse de Dépôt et Placement du Québec invested $150 million into the now troubled Celsius Network.

Recall that the crypto lender abruptly halted all withdrawals on its platform last month due to extreme market conditions. The firm has since contracted lawyers to begin its restructuring process.

Obviously, the negative outlook did little to impact Fairfax County’s interest in the space.