British pension fund manager Cartwright has advised an unnamed fund to allocate 3% of its assets into the flagship cryptocurrency Bitcoin (BTC) in what was deemed a “forward-thinking” step and was effectively the first UK pension fund to allocate to BTC.
According to a report from Corporate Adviser, the fund has allocated a small percentage of its £50 million (around $65 million) worth of asset into Bitcoin in a move that aligns with the pension scheme’s long-term investment strategy and was supported by “robust risk management at both asset and scheme levels.”
Cartwright’s director of investment consulting, Sam Roberts, noted that trustees are “increasingly looking for innovative solutions to future-proof their schemes in the face of economic challenges,” and added the BTC allocation not only offers diversifications but “taps into an asset class with a unique asymmetric risk-return profile.”
The pension fund, according to reports, notably invested in Bitcoin directly instead of through a proxy offering it exposure, such as a spot Bitcoin exchange-traded fund (ETF) or shares of MicroStrategy, the largest corporate holder of Bitcoin.
The fund’s investment came with a price of around $65,800, and the private keys for the cryptocurrency wallet were split between five different institutions.
Glenn Cameron, head of digital assets at Cartwright, noted the investment’s potential upside is significant, adding:
“If you look at the correlations of bitcoin with 14 other asset classes, the 60-day correlation centres around zero. Investor need certain investment horizons, and it needs to fit within their risk appetite.”
Pension funds investing in BTC
While this was the first British pension fund to invest in the cryptocurrency, earlier this year the State of Wisconsin Investment Board invested over $160 million in BTC through ETFs, adding exposure to the cryptocurrency for the Wisconsin State Pension Fund.
Similarly, the Michigan State Retirement System invested $6.6 million in spot Bitcoin ETFs over the summer, in a move that aligned with its diversification strategy. Despite these institutional allocations, data has shown retail investors lead the demand for spot Bitcoin ETFs.
