2 Virgina Pension Funds Ease Into Crypto Lending via VanEck New Finance Income Fund

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On Tuesday (July 5), global investment manager VanEck announced that two retirement systems in Fairfax county (which is in the state of Virginia, United States) have invested some of their funds in its crypto lending fund.

VanEck, which was founded in 1955, has been “at the forefront in researching and advocating for this asset class since 2017, in terms of establishing a mature market structure as well as by working closely with global regulatory agencies to provide efficient investment solutions to clients.” MarketVector Indexes GmbH, which is one of its subsidiaries, was “the first regulated index provider to offer digital asset indices to meet industry benchmarking standards.”

VanEck “operates a myriad of European-listed digital asset exchange-traded products, and in the U.S., VanEck launched the first pure-play U.S. ETF to invest in publicly listed companies involved in digital assets”. It also “offers exposure to bitcoin through a strategy that invests in bitcoin futures, as well as direct bitcoin access to both accredited U.S. investors and qualified offshore investors.”

VanEck New Finance Income Fund, LP is “a convenient way to potentially generate income from the digital asset ecosystem without taking direct crypto price risk.” The fund aims to “provide attractive income to investors via short-term lending arrangements with digital asset entities.” Here are its three main benefits:

  • “Provides high-yield income exposure to fast-growing crypto asset class.“
  • “Potential lower volatility as compared to direct digital asset exposure.“
  • “Simplified approach that alleviates the operational burden of direct digital assets lending.“

Here is some additional information about the fund:

“The investment objective of the Partnership is to provide attractive income generally through short-term lending arrangements with borrowers in the digital asset industry. Borrowers in the digital asset industry include, but are not limited to, digital asset platforms, exchanges and businesses. In seeking to achieve its investment objective, the Partnership will actively manage lending arrangements by allocating loans to various borrowers in the digital asset industry based on the Manager’s review of lending terms such as fixed term vs. open term, expected yield, maturity and other factors.

“The Partnership will engage in the lending of currency constituting legal tender (‘fiat currency’, primarily the U.S. dollar, and in the lending of digital assets that are pegged to and/or backed by, or algorithmically targeted to, a fiat currency (‘stablecoins’), such as the U.S. dollar, and are designed to seek to have a stable value over time.“

These are the main specs:

In a press release issued yesterday, VanEck announced “the initial tranche of a $35 million commitment in the VanEck New Finance Income Fund, LP, by two retirement systems in Fairfax County, Virginia.” This investment by the Fairfax County Employees’ Retirement System and the Fairfax County Police Officers Retirement System “demonstrates growing institutional adoption of digital assets, as opportunities continue to mature.”

It is worth pointing out that the VanEck New Finance Income Fund is only available to U.S. accredited investors.

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