Cartwright is calling on UK institutional investors to ‘catch up’ with competitors worldwide in backing Bitcoin, following the nation’s first allocation to a DB scheme, as revealed in Corporate Adviser last week.
The pension specialist, focused on defined benefit and hybrid schemes, is stressing that integrating bitcoin into pension schemes is “a bold step that reflects the forward-thinking nature of the trustees involved.”
The firm has now advised its first scheme on a 3 per cent bitcoin allocation in October. According to Cartwright, the move aligns with the undisclosed scheme’s long-term investment strategy, supported by robust risk management at both asset and scheme levels.
Cartwright director of investment consulting Sam Roberts says: “Trustees are increasingly looking for innovative solutions to future-proof their schemes in the face of economic challenges. This 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.
“Our approach ensures that schemes can benefit from the significant potential upside whilst limiting the potential downside. Integrating bitcoin into a pension scheme’s investment strategy is a bold step that reflects the forward-thinking nature of the trustees involved. We are proud to have led this ground-breaking move which we hope will be the start of a trend for institutional investors in the UK to catch up with their increasing number of peers and competitors around the world who are already taking advantage of bitcoin’s unique attributes*.”
Cartwright head of investment implementation Steve Robinson says: “The operational procedures around this bitcoin investment have been designed to maximise the security of the asset whilst allowing profits to be taken quickly as and when they arise. Our commitment to actively engage with emerging innovative technologies means we can ensure that trustees remain at the cutting edge of investment solutions. By combining a highly secure custodial solution with a mechanism to quickly trim profits as they arise, we’ve opened the door for risk-averse pension schemes and other institutional investors to benefit from bitcoin’s potential growth whilst managing volatility within a secure strategic framework.
“The solution created also has a low minimum investment threshold meaning that this option is available to pension schemes of all sizes, unlike many historic investment ideas when they first become available. We are excited to be at the forefront of integrating this exciting asset into a traditionally conservative space and we are confident that this strategic move, coupled with our secure custodial approach, will provide long-term value to scheme members while offering an innovative way to reduce reliance on employer contributions.”