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The Ontario Teachers’ Pension Plan (OTPP) has decided to steer its investment away from cryptocurrencies.
The decision follows the OTPP’s loss of its entire $95 million investment in the crypto exchange FTX after the platform collapsed in November 2022. The pension plan manages over $190 billion in assets.
OTPP was one of many backers of the now-bankrupt exchange, having invested twice: once during the bull market in 2021 and again during the exchange’s Series C funding round in early 2022.
OTPP Chief Executive Jo Taylor stated in an interview with the Financial Times that it would be unwise for the pension fund to rush into another crypto investment. Taylor noted that the fund is still processing the events surrounding the exchange and will be much more cautious before investing in emerging assets like digital currencies. The pension fund is responsible for providing pensions to over 330,000 teachers and school workers.
“We took our time and did a lot of due diligence on the business. It didn’t turn out the way we thought. We weren’t necessarily shown all the information we needed to know to make a balanced decision.”
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The pension fund is now looking to direct its investments toward more traditional markets, such as real estate, and aims to gain exposure to the private credit sector. The investment plan provider intends to invest 10 billion Canadian dollars ($7.4 billion) over the next three years to build its portfolio in these areas.
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In addition to OTPP, the Caisse de dépôt et placement du Québec (CDPQ), another prominent pension fund, lost its entire $154.7 million investment in the troubled cryptocurrency lender Celsius Network. Celsius was one of many crypto lenders that failed during the crypto contagion in the second quarter of 2022.
The dramatic collapse of FTX, then the third-largest crypto exchange, had a drastic impact on the entire ecosystem. Investor and venture capital confidence in the crypto sector reached a low point as crypto funding dried up. The event also shifted the narrative around mass adoption and attracted regulatory scrutiny from around the world.
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