hip London
The UK is the first pension fund to invest in Bitcoin. Like the consulting firm that specializes in defined benefit and hybrid retirement plans Cartwright announced that the unnamed fund put 3% of its volume into the cryptocurrency. This reflects his “comparatively long-term” investment horizon.
Asymmetric return profile
“Fiduciaries are increasingly looking for innovative solutions to future-proof their plans in the face of economic challenges,” said Sam Roberts, director of investment consulting at Cartwright. According to the pension fund advisor, Bitcoin’s asymmetric return profile allows a small allocation to have a large positive impact financially.
Cartwright expects an adoption curve similar to that of stocks in the 1970s, high-yield bonds in the 1980s or LDI (liquidity-driven investment) from 2010 onwards. It could take a while for institutional investors to feel comfortable with it, but then it could become a reputational risk that the asset class was not taken into account when constructing the portfolio.
