Canada’s second largest pension fund supervisor has written off its $150mn investment in crypto lending platform Celsius Network and conceded it went into crypto “too soon”.
Charles Emond, chief govt of Caisse de dépôt et placement du Québec (CDPQ), stated its investment in Celsius final October marked the top of its foray into the digital asset business.
Celsius grew to become one of many largest names to be caught by the sharp collapse within the value of digital property within the spring. In June it froze buyer withdrawals and weeks later filed for Chapter 11 chapter safety in New York, a transfer that exposed a $1.2bn gap within the firm’s stability sheet.
CDPQ, the $304bn investment agency that manages pension plans and insurance coverage programmes in Quebec, stated on Wednesday the stake in Celsius was written off “out of prudence”.
“For us it’s clear when we look at all of this, even if the last chapter has not been written, that we went in too soon into a sector that was in transition, with a business that had to manage extremely quick growth,” Emond stated.
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The group’s feedback on Wednesday mark a pointy distinction to October, when it stated its Celsius investment was an indication of its “conviction” in blockchain expertise.
The write-off of the group’s Celsius holdings — a small slice of its general portfolio — got here because the fund supervisor reported a C$28bn ($22bn) fall in property within the six months to the top of June this 12 months. CDPQ stated its portfolio was hit by a “rare and simultaneous” fall in each equity and bond markets, which led to a 7.9 per cent hit on its portfolio.
“The first six months of the year were very challenging,” stated Emond, including that its portfolio had nonetheless carried out higher than its benchmark, which was down 10.5 per cent.
Responding publicly for the primary time since Celsius’s slide into chapter 11, Emond stated: “Whether it is Celsius or any other investment, needless to say that when we write it off, we are disappointed with the outcome and not happy”.
Emond stated he was conscious there have been challenges concerning crypto investments, however that “perhaps we underestimated the challenges”.
He felt “a lot of empathy” for Celsius buyers, and stated the fund supervisor was “reserving our comments and exploring our legal options” associated to the scenario.
Asked if he regretted the Celsius investment, Emond, stated: “As an investor it is a constant and never-ending learning process. You learn and make sure you don’t repeat the mistake.” He added the corporate by no means takes “any dollar loss lightly”.
Emond declined to enter element on the inner repercussions of the investment. However, he added that “the teams will be accountable, as they always are”.
He additionally confirmed that CDPQ just isn’t fascinated about additional investments into crypto however stated the pension fund supervisor was nonetheless optimistic on the way forward for blockchain expertise. “The straight answer would be yes . . . you know, in these disruptive technologies, there’s ups and downs.”