Canada’s biggest pension plan, CPPI, ends crypto investment pursuit -sources.
Sources: CPPI, the largest pension plan in Canada, abandons its cryptocurrency investment plans.
According to two people with knowledge of the situation who spoke to Reuters, Canada’s largest pension fund, CPP Investments, has concluded its nearly year-long investigation into investment opportunities in the volatile cryptocurrency market.
The reasons behind CPPI’s decision to stop conducting cryptographic research were not immediately apparent. CPPI claimed it has not made any direct investments in cryptocurrencies but declined to comment. It made reference to earlier warnings made by the company’s CEO, John Graham, regarding cryptocurrencies.
Early in 2021, CPPI’s Alpha Generation Lab, which studies emerging investment trends, established a three-person team to investigate cryptocurrencies and blockchain-related companies in order to gain potential exposure.
However, according to the sources, CPPI gave up this year and redirected the team to other areas.
However, according to the sources, CPPI gave up this year and redirected the crew to other areas.
The decision by CPPI also comes after the collapse of cryptocurrency exchange FTX and cryptocurrency lender Celsius this year, which led to the write-off of investments by two of Canada’s largest pension funds.
Earlier this year, CPPI CEO Graham stated that the pension plan did not want to invest in cryptocurrencies simply out of a fear of missing out. The pension plan manages C$529 billion ($388 billion) for nearly 20 million Canadians.
In a speech in June, Graham advised investors to “truly consider what the underlying intrinsic worth is of some of these assets and structure your portfolio accordingly.” So, I’d say we continue to research and attempt to understand cryptocurrency, but we haven’t actually made any investments in it.
When the CPPI abandoned its strategy is unknown. The team reportedly finished its work earlier than July this year, according to one of the individuals, who claimed the team was still actively evaluating investment prospects at that time.
There hasn’t been any prior reporting on the specifics of COP’s pursuit of bitcoin investing and its decision to discontinue it.
The sources declined to give their names because the data was confidential.
Following the FTX fiasco, Canadian pension funds’ exposure to the cryptocurrency market has come under examination. Although it is legal for Canadian pension plans to purchase cryptocurrencies, they are renowned for their cautious investment approaches that produce steady returns for retirees.
Caisse de dépôt et placement du Québec (CDPQ), the second-largest pension fund in Canada, announced earlier this year that it was writing off its C$150 million stake in the defunct cryptocurrency lending company Celsius. Celsius is the target of legal action from CDPQ in bankruptcy court.
Through its OMERS Ventures division, the Ontario Municipal Employees Retirement System (OMERS), which oversees C$121 billion, made three allocations to companies with a crypto-related business between 2012 and 2018, although it sold out of all of those investments in 2020.
According to OPTrust, a different Canadian pension fund, which is administered externally, the fund includes investments in the area of digital asset funds. According to it, the investment is in the underlying cryptography technology.
(1 Canadian dollar = 1.3650)
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