First UK pension fund invests 3% of assets to Bitcoin

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Key Takeaways

A UK pension fund has invested 3% of its assets in Bitcoin, becoming the first British scheme to do so.
The Bitcoin investment aims to offer diversification and tap into a unique asymmetric risk-return profile.

An undisclosed UK pension fund has invested 3% of its total assets in Bitcoin, marking the first ever Bitcoin investment by a British defined benefit scheme, according to pension specialist Cartwright, first reported by Corporate Adviser. Cartwright now urges UK institutional investors to support Bitcoin investments to keep pace with global trends.

The first Bitcoin allocation in the UK occurred in October after a thorough due diligence process. According to Sam Roberts, Cartwright’s director of investment consulting, Bitcoin is well suited to the scheme’s 10-year investment horizon.

“Trustees are increasingly looking for innovative solutions to future-proof their schemes in the face of economic challenges,” said Roberts. “This Bitcoin allocation is a strategic move that not only offers diversification, but also taps into an asset class with a unique asymmetric risk-return profile.”

Glenn Cameron, head of digital assets at Cartwright, said that Bitcoin’s unique asymmetric return profile means that even a small allocation can significantly impact financial performance.

The pension specialist has implemented operational procedures focusing on asset security while maintaining flexibility for profit-taking. The investment structure features a low minimum threshold, making it accessible to pension schemes of various sizes.

With trustees recognizing Bitcoin and other crypto assets’ potential advantages in diversified investment portfolios, the latest development could pave the way for wider institutional adoption.