Cartwright Fund Allocates 3% to Bitcoin in UK Pension Scheme
Cartwright, an independent business and specialist pension scheme advisor, urges UK institutional investors to adopt Bitcoin following the nation's first allocation to a defined benefit (DB) scheme.
Cartwright's New Allocation Strategy
Cartwright emphasized the importance of incorporating Bitcoin into retirement plans. The firm recently advised its first scheme on a 3% Bitcoin allocation, aligning with its long-term investment strategy while prioritizing robust risk management at both the asset and scheme levels.
Sam Roberts, Cartwright’s director of investment consulting, noted that trustees are increasingly seeking new solutions to future-proof their pension schemes amid economic uncertainties:
This Bitcoin allocation is a strategic move that offers diversification and taps into an asset class with a unique asymmetric risk-return profile. Integrating Bitcoin into a pension scheme’s investment strategy reflects the forward-thinking nature of the trustees involved.
Roberts highlighted that while Bitcoin presents significant potential upside, it requires careful management of associated risks. He stated, “Our approach ensures that schemes can benefit from the significant potential upside while limiting the potential downside.”
Bitcoin In Pension Plans
Steve Robinson, Cartwright's head of investment implementation, discussed operational procedures for Bitcoin investments, tailored to maximize asset security while enabling swift profit-taking:
Our 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 for quick profit capitalization, Cartwright aims to make Bitcoin accessible to risk-averse pension schemes. A low minimum investment threshold will allow a wider range of pension schemes to participate, contrasting with traditional investment ideas requiring substantial capital.
The firm expressed optimism that this strategic move will encourage other UK institutional investors to explore the benefits of Bitcoin. Robinson concluded that this approach will provide long-term value to scheme members while reducing reliance on employer contributions, ultimately enhancing the sustainability of pension funds in an evolving economic landscape.
Despite these moves by pension funds worldwide to invest in Bitcoin, the largest cryptocurrency was trading at $67,760 at the time of writing, reflecting recent volatility ahead of the anticipated US presidential election on November 5.
Featured image from DALL-E, chart from TradingView.com