Cartwright, an independent business and specialist pension scheme advisor, is urging UK institutional investors to embrace Bitcoin following the nation’s first allocation to a defined benefit (DB) scheme. Cartwright, specializing in defined benefit and hybrid pension schemes, recently announced that it has advised its first scheme on a 3% Bitcoin allocation. This move is part of a long-term investment strategy that emphasizes robust risk management at both the asset and scheme levels.
Sam Roberts, Cartwright’s director of investment consulting, highlighted the growing trend among trustees to seek new solutions to future-proof their pension schemes amid economic uncertainties. According to Roberts, the 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. Integrating Bitcoin into a pension scheme’s investment strategy, he noted, is a bold step reflecting the forward-thinking nature of the trustees involved. Roberts emphasized that while Bitcoin has significant potential upside, it also requires careful management of associated risks. Their approach ensures that schemes can benefit from the significant potential upside while limiting the potential downside.
Steve Robinson, Cartwright’s head of investment implementation, elaborated on the operational procedures for Bitcoin investments. He explained that these procedures have been tailored to maximize the security of the asset while enabling swift profit-taking. Cartwright’s commitment to engaging with emerging innovative technologies ensures that trustees remain at the cutting edge of investment solutions. By combining a secure custodial solution with mechanisms to capitalize on profits quickly, Cartwright aims to make Bitcoin accessible to risk-averse pension schemes. The low minimum investment threshold will reportedly allow a wider range of pension schemes to participate, contrasting with traditional investment ideas that often require substantial capital.
The firm expressed optimism that this strategic move will inspire other institutional investors in the UK to follow suit and explore the benefits of Bitcoin. Robinson concluded that this approach will provide long-term value to scheme members while reducing the reliance on employer contributions. This, he believes, will ultimately enhance the sustainability of pension funds in an evolving economic landscape.
Despite these innovative moves by pension funds worldwide to invest in Bitcoin, the largest cryptocurrency on the market was trading at $67,760 at the time of writing. This reflects the volatility experienced in recent days ahead of the anticipated US presidential election on November 5.
