UK Pension Fund Cartwright Encourages 3% Allocation to Bitcoin Investment

Key Points:

• UK pension fund Cartwright advised the country’s first defined benefit pension fund to allocate 3% to Bitcoin.
• Cartwright launched a Bitcoin Employee Benefits program, allowing companies to pay staff in Bitcoin.

UK pension fund Cartwright has recommended that the country’s first defined benefit pension fund invest some of its assets in Bitcoin, becoming the first in the industry to make such a move.

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First UK Pension Fund Enters Bitcoin on Recommendation from Cartwright

The trustees of the fund, assisted by Cartwright, set a 3% weighting to Bitcoin last month, which is the very first such investment to take place in UK pension funds.

UK pension fund Cartwright said the move was “a bold step that reflects the forward-thinking nature of the trustees involved”. The decision to allocate followed extensive discussions with the trustees on topics including ESG and security.

In addition to investing in the pension fund, it launched a Bitcoin Employee Benefits scheme. This is designed for employers to deposit Bitcoin directly into wallets set up for their employees. Five companies have already shown interest in the initiative, an indication of growing institutional openness towards cryptocurrency in the employee compensation structure.

Groundbreaking Move Previews Widening Institutional Interest in Cryptocurrency

These efforts by Cartwright align with the firm’s objective of making Bitcoin more available to institutions in the UK. The consultancy hopes this will be a leading example that will see other pension funds looking into Bitcoin as an asset class, which is largely the case as seen globally across institutions.

For example, the State of Wisconsin Investment Board has recently invested $160 million in Bitcoin ETFs, while the Michigan Retirement System holds about $6.6 million in Bitcoin ETFs and about $10 million in Ethereum ETFs.

Despite Bitcoin’s usual volatility, which would normally scare off risk-averse investors, Cartwright believes the asset could actually fit within a long-term, liability-driven investment strategy and give additional diversification benefits to institutional portfolios.

The firm likened the step to the first adoptions of equities in the 1970s and high-yield bonds in the 1980s. It forecasts that other U.K. pension schemes may soon follow this forward-looking approach.