Canada’s largest pension fund, Canadian Pension Plan Investment (CPPI), has ended all its crypto research efforts without providing a convincing reason for its decision. However, it claims to have made no direct investments in crypto, referring those seeking official responses to previous comments made by the CEO, John Graham.
CPPI’s latest developments come after the collapse of FTX and Celsius. These events saw some of Canada’s top pension funds write off their investments.
How it all started
To catch up with emerging trends and potential exposure to cryptocurrency, CPPI formed a three-member team to research cryptocurrencies and blockchain-related businesses in 2021.
But the company abruptly abandoned the research this year and redeployed the three man team member to other departments.
Earlier this year, the CEO of CPPI, John Graham, revealed that the company managed $388 billion for nearly 20 million Canadians. As a precaution, the CEO said they wouldn’t want to rush into cryptocurrency.
In his words:
“You want to really think about what the underlying intrinsic value is of some of these assets and build your portfolio accordingly,” Graham said in a June speech. “So I’d say crypto is something we continue to look at and try to understand, but we just haven’t really invested in it.”
Even so, anonymous sources reveal that it’s possible that the CPPI has yet to wholly drop its plan on assessing crypto opportunities because the fund was assessing investment opportunities till July.
Due to the devastating effects of the FTX collapse, Canadian pension funds exposed to crypto assets have been subjected to heavy scrutiny. However, there aren’t any existing laws prohibiting these companies from engaging in crypto opportunities.
Based on records, Canadian pension funds are known to have a penchant for risk-averse investing strategies aimed at generating steady returns for pensioners.
But CPPI is one of the Canadian companies with little or no involvement in cryptocurrencies yet. It is unlike contemporaries, like the Ontario Teachers Pension Fund (OTPP), which oversees about C$242 billion in assets, which recently wrote off C$95 million of its investment in FTX.
Between 2012 and 2018, the Ontario Municipal Employees Retirement System (OMERS), which oversees C$121 billion, allocated funds to three crypto-related companies through its OMERS Ventures division. However, it sold out of all of these investments in 2020.
Caisse de dépôt et placement du Québec (CDPQ), Canada’s second-largest pension fund, while initiating legal proceedings against Celsius in bankruptcy court, also announced that it would be writing off its C$150 million investment it had with Celcius.
OP Trust, another Canada-based pension fund,
revealed that all its investments in digital assets, including cryptocurrencies, are managed externally.