Fairfax County of Virginia has begun investing part of its $35 million allocation in a cryptocurrency lending fund managed by global asset managers VanEck.
The firm announced that it has received an initial tranche of investment commitments from Fairfax County, which is allocating funds from two pension schemes to various cryptocurrency-focused investment streams.
Fairfax County has previously hinted that it is diving into the world of decentralized finance (DeFi) to grow crops as part of its progressive take on the cryptocurrency space. Starting in 2018, the county began investing a small portion of funds from the employee pension system and the police pension system into various cryptocurrency companies and enterprises.
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As Fairfax continues to diversify its cryptocurrency investing strategy, its foray into the DeFi world has officially begun with an investment in New Finance Income Fund VanEck. The fund offers short-term loan agreements with crypto-currency companies, platforms and businesses.
According to the VanEck website, the fund lends fiat currency and stablecoins to borrowers in the cryptocurrency space. Targeting accredited investors, the fund offers highly profitable cryptocurrencies and requires an initial investment of $1 million. The investment manager touts “a simplified approach that eases the operational burden of direct digital asset lending.”
Fairfax County has been slowly ramping up its funding in this space, with funds allocated to seven cryptocurrency-focused appropriations. One of these distributions aims to profit from volatility in space, with the hedge fund intending to exploit crop farming, underlying trading, and stock arbitrage opportunities.
The county previously released an update on its investments in the cryptocurrency and blockchain space, with employee and police pension systems investing $10 million and $11 million respectively in the Morgan Creek Blockchain Opportunity Fund.
The capital allocation from both funds is less than 1% of their total assets under management as the county is slow to assess investment potential in an alternative asset class.