Canada’s Largest Pension Fund Isn’t Betting On Bitcoin Anytime Soon
Bitcoin is not ready for institutional investors, says Canada Pension Plan Investment Board.
Canada’s largest pension fund doesn’t expect institutional investors to bet on Bitcoin anytime soon, saying they would wait for a few years before taking the plunge.
“I am more in the Llyod (Blankfein) camp. I think it’s interesting, it’s worth watching,” Mark Machin, president and chief executive officer at $255-billion Canada Pension Plan Investment Board, said in an interaction with journalist in Mumbai. “Everybody understands that the blockchain technology could be truly transformational.”
Bitcoin rose to as high as $19,697 on Coinbase, sparking fears of a bubble. Blankfein, chief executive officer of Goldman Sachs, had said in an interview to Bloomberg Television that something that moves up and down 20 percent in a day doesn’t feel like a currency or a store of value. “If it works out—and it gets more established, and it trades more like a store of value, and it doesn’t move up and down 20 percent, and there is liquidity to it—we’ll get to it.”
Machin said that given the volatility bitcoin “is not ready for institutional investors at this stage”. “We have seen funds put together to invest in cryptocurrencies on a diverse basis. At some point in the next few years, it may well be something that institutional capital may accept broadly among all the currencies.”
India Investments
CPPIB will keep looking at yield-oriented assets in India where it has so far invested $4.6 billion mostly in infrastructure and real estate. “We would like to hold assets for a long time and get income from it over a longer period,” Machin said.
The pension fund has exposure to toll roads through Infrastructure Development Projects Ltd., the roads and highway arm of Larsen and Toubro Ltd., It has also invested in warehousing through Indospace and in real estate via a joint venture with Phoenix Group and Shapoori Pallonji Group.
“There are a lot of brownfield opportunities in India. We step in helping developers to recycle capital,” said Vikram Gandhi, senior adviser for the fund in India.
Machin said CPPIB is very choosy about its investments. “We look at the right partner, scale and risk and return before investing in any country. Our returns are substantially higher in India than net average returns for our fund.”
(Updates an earlier version to correct the assets that CPPIB manages)