As part of a strategy to boost income through asset volatility, Virginia Police Pension Supervisor Katherine Molnar is exploring the possibility of investing in funds that offer income farming.
Fairfax County Police Retirement Investment Director Katherine Molnar at the Milken Institute conference reported that the system is considering investing in two investment funds specializing in cryptocurrencies within three weeks. Molnar noted that the Fairfax pension system has already invested seven times in two funds, including venture capital funds and a structure that contains illiquid tokens at an early stage and liquid tokens at a later stage.
She elaborated that among these seven capital allocations, they implemented various strategies to exploit the volatility of cryptocurrencies. Now they intend to invest in investment funds specializing in various strategies for using cryptocurrencies, including farming, basic trading and inter-exchange arbitrage. Molnar believes that the system is ready to use new strategies to generate income, which can only be provided by new cryptocurrency tools.
“Instead of being intimidated by the volatility of this asset class, we are trying to find a context in which to exploit it. Volatility is very good for different financial strategies,” notes Molnar.
The two new hedge funds the system works with are using offline farming strategies, according to the chairman of the pension system. Income farming generates profits from 4% to 1,000% by placing or lending assets on decentralized exchanges. Molnar said that she sees profitable farming as an alternative to fixed income and an opportunity to get higher profits than from investments in traditional assets, which are critically dependent on the economic situation.
“We use farming as a high yield substitute with an expected return of 9-11%. This is slightly higher than fixed income,” Molnar said.
In some cases, she said, the pension fund has already negotiated with hedge fund managers for a wider distribution of investments to generate higher returns.
It is worth noting that investment in cryptocurrencies by the Virginia cops’ pension system is the exception rather than the trend. In March, the US Department of Labor urged employers to exercise extreme caution when considering adding cryptocurrencies to the investment menu of a retirement savings plan.
Source: Bits
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