As pension funds struggle with their funding, Morgan Creek Digital co-founder Anthony Pompliano continues to press them into adding more Bitcoin into their portfolios.
In a letter to investors, Pompliano said pension funds like the California Public Employees’ Retirement System (CalPERS) will do well to invest in Bitcoin instead of increasing their allocations of illiquid assets. “It is as clear as possible — adding an allocation to Bitcoin would increase the risk-adjusted returns for a public pension fund,” said Pompliano.
He suggests pension funds allocate between 1-5% of their portfolios in Bitcoin. He added:
“And you want to know where the greatest innovation is occurring at the moment? Bitcoin. There is a group of individuals who have built a $150+ billion asset with the goal of assuming the position of the next global reserve currency. If that happens, it will be the best performing asset for the next 20+ years. But even if that doesn’t happen, things will be okay.”
Morgan Creek has long pushed for more pension funds to take at least 1% allocation in Bitcoin. CEO Mark Yusko said in January that if foundations had a 1% allocation five years ago, they would’ve made 9.2% in alpha–or the performance of a portfolio relative to a benchmark–than the 7.2% they actually made in that time period. So far, there are two pension funds from Virginia that invested in Morgan Creek.
Morgan Creek is not the only industry player seeing the potential for crypto’s growth within the pension world. Avanti Bank founder and CEO Caitlin Long told Cointelegraph in April that the crypto and blockchain industries need to prove they are solvent to big pension funds like CalPERS.