Fairfax County highlights the value in the ‘short-term nature’ of yield farming
Virginia’s Fairfax County continues to be a distinguished public institutional investor within the cryptocurrency house and is about to diversify its portfolio with a transfer into yield farming.
As beforehand reported, world asset managers VanEck introduced that the Fairfax Staff’ Retirement System and Police Retirement System will make investments $35 million into the agency’s crypto lending fund. It’s the newest funding transfer by the 2 county-run funds within the cryptocurrency house since their authentic foray started in 2018.
Cointelegraph reached out to Andy Spellar, the chief funding officer of the Fairfax Staff’ Retirement System, to unpack their funding in VanEck’s crypto lending fund and the reasoning behind it.
Spellar confirmed that the Staff’ Retirement System (ERS) had dedicated $25 million to the fund whereas the Police Officers’ Retirement System (PORS) had pledged $10 million. The funding will happen between July and September this yr, relying on market situations.
An preliminary tranche has already been obtained by VanEck, with Spellar revealing that the ERS and PORS have invested $10 million and $5 million, respectively, for the month of July.
The transfer is definitely excellent news for the cryptocurrency house, which is at the moment enduring a extreme downturn alongside typical inventory markets worldwide. The decentralized finance (DeFi) sector has arguably suffered essentially the most, with the collapse of algorithmic stablecoin Terra inflicting a cascading impact all through the house.
Associated: Survey reveals 55% of crypto buyers selected to HODL as Bitcoin and altcoin costs collapsed
As the broader cryptocurrency ecosystem weathers the storm, funding schemes and funds like Fairfax County’s ERS and PORS proceed to see the worth provided by the sector, as Spellar informed Cointelegraph:
“Now we have appeared on the house as a diversifier with our credit score/excessive yield portfolios and notably efficiency durations just like the very short-term nature (1–3 months) of the positions.”
Spellar provided meals for thought on the present market situations, noting {that a} risk-adjusted foundation outlook means that cryptocurrency markets haven’t offered off any greater than excessive development sectors like tech, life sciences or authorities bonds:
“Now we have not seen something to counter the long-term thesis that extra issues than much less will likely be digitized sooner or later, together with conventional belongings themselves. Most of these markets shake out weak gamers and applied sciences and are general wholesome for markets and industries.”
The ERS and PORS funds have managed to fare nicely amid broad market sell-offs attributable to their broadly diversified portfolios. Spellar famous that each are top-performing public funds throughout brief and long-term time domains and expects the newest quarter of the yr to be no totally different when it comes to efficiency.
Regardless of the primary six months of 2022 being one of many worst efficiency durations on document, Fairfax expects each techniques to be prime decile performers over the interval. Spellar mentioned the digital asset phase of their portfolio was very small, with the overwhelming majority made up of conventional enterprise capital fairness investments.
