According to Bloomberg, renowned digital asset firm Morgan Creek Digital has successfully closed a new $40 million blockchain-specific venture capital fund. It has done this because of major contributions from two US public pensions.
Initially, the venture looked to raise $25 million.
Morgan Creek Digital
Backed by finance behemoth Morgan Creek Capital, Morgan Creek Digital is a hedge fund. The new venture—called the Morgan Creek Blockchain Opportunities Fund—has been created specifically for investment into the digital asset space.
Pension Plans
The two pension plans are based in Virginia. They are ‘anchor investors’ in the new venture capital fund. Other investors include an insurance company, a university endowment, and a private foundation.
Volatility and Regulations
The sizeable investment into Morgan Creek Digital from the two pension funds is notable. It is a rarity that institutional investors make the leap into the volatile and largely unregulated cryptocurrency market. Precisely because of those reasons, many enthusiasts question if digital assets will ever be adopted on a world-scale. Market manipulation, price volatility, and questionable regulations constantly deter major financial bodies and institutions from backing crypto-related projects or investments.
The Virginia pension funds are two of only a handful of institutions (including Yale University) to invest in the crypto world.
Morgan Creek Digital Innovation
Katherine Molnar, chief investment officer of one of the pension funds, called the investment into the Blockchain Opportunities Fund an “emerging opportunity” offering an “attractive asymmetric return profile.’’
Structured like a traditional venture capital fund, the new fund will invest in the equity of companies in the blockchain and digital assets industry. It will hold a small amount of its wealth in cryptocurrencies.
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It works like this:
“Traditional assets will eventually be represented by digital tokens, while the influx of intellectual capital into digital assets will create positive returns.”
The team goes on to explain that “cryptocurrencies are not correlated to traditional assets, giving investors unique exposures.”
Do you think Morgan Creek Digital getting backing from two US pensions might spur on further institutional investment?
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