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As a contributor the mentionned fund that invested 750m into that exchange (it is a mandatory government saving taking ~10% of our paycheck each month) I must s
by Sytten 4y ago
As a contributor the mentionned fund that invested 750m into that exchange (it is a mandatory government saving taking ~10% of our paycheck each month) I must say I am really pissed off. They don't invest in our own early stage startup citing "risk" and then they go and invest in a foreign crypto exchange of all things.
- bpicolo 4y agoPension funds going into high-risk company ventures operating in a regulatory grey area is insane.
- lotsofpulp 4y agoDefined benefit pension funds have always been a nice pot of money to enable corruption. That is why IRA/401k is better. Just let people choose what they want from Vanguard/Fidelity/Schwab.
- ATsch 4y agoAlternatively, one could imagine a pension system where the state gives one money to ensure one can continue living, paid for by taxes, without inserting a casino in the middle. But perhaps that's a tad radical.
- deleted 4y ago[deleted]
- lotsofpulp 4y agoWhile it might not be sufficient to ensure one can continue living, in the US, Social Security has been in effect since 1940 or so.
- ATsch 4y agoIndeed, but it's been steadily deliberately undermined as the idea that a government has no responsibility to it's citizens except to keep the line going up and trickle down economics took root. It's easy to see how pension funds play into this. They are a tool that ties up millions of people's future and savings into the stock market, providing the financial sector with a huge number of retail investors who can be made to hold the bag for financial crashes. Under this angle, it is not at all surprising that they would end up investing into incredibly risky ventures.
- rchaud 4y agoDefined Benefit pensions went the way of the dodo ages ago because it's too expensive for employers. Everybody is now at the mercy of defined contribution plans.
- lotsofpulp 4y agoTaxpayer funded DB pensions are very alive today. Lots of big pots of money for politicians and government employee union leaders to play with (or influence), and extremely easy way to pay government employees with debt without actually having to admit it is debt due to taxpayer funded DB pensions being exempt from regulations regarding proper accounting such as ERISA 1974 and PPA 2006. See: http://www.data-z.org/pension_database http://www.data-z.org/pension_database
- heretogetout 4y agoIt's wild to me that public pensions are allowed to invest in individual companies.
- jelling 4y agoUnfortunately, a lot of pension funds are behind so the started taking more risk. Frontline did a good piece called "The Pension Gamble" on this: https://www.pbs.org/wgbh/frontline/film/the-pension-gamble/ https://www.pbs.org/wgbh/frontline/film/the-pension-gamble/
- strix_varius 4y agoThanks for the great link (just watched it). The whole idea of a "defined benefit" pension seems insane to me. It's essentially a promise that some entity will still exist and be solvent in 40+ years (start teaching around 22, retire around 65...)
- huijzer 4y agoIndeed. The same decline in pension funds occurred in the 2007 crash and other crashes. Unfortunately that’s often the reality when people manage other’s people’s money. The gains result in large bonusses for the money managers and the losses result in large losses for the investors. The incentives are wrong.
- qeternity 4y agoHeads I win, tails you lose.
- arein3 4y agoSame problem in government as well. People that manage expensive assets are not punished if they make bad decisions
- willcipriano 4y agoI would argue that authority without responsibility is the core issue in societies today.
- dan-robertson 4y agoThat’s the case with a typical hedge fund but is it the case for pension funds like this one? I thought pension fund managers were not particularly incentivised to take risks for larger returns, but I don’t really have evidence for this assertion.
- jeromegv 4y agoThe round was 750m, la Caisse invested 150 millions. What's absolutely bunkers is that no major Quebec news sites are talking about this news this morning. La Presse, Journal de Montreal, TVA, nothing. (TVA is mentioning that the crypto market is down and casually mention la Caisse investment down in the article, but it's hardly an important news) Radio-Canada did make a major investigation into this investment few weeks ago (how timely!) but has yet to update it https://ici.radio-canada.ca/recit-numerique/4095/caisse-depot-cryptomonnaie-celsius-quebec https://ici.radio-canada.ca/recit-numerique/4095/caisse-depo...
- rednik 4y agoJournal de Montreal has this (published 6 minutes ago) https://www.journaldemontreal.com/2022/06/13/cryptomonnaie-celsius-network-suspend-les-retraits https://www.journaldemontreal.com/2022/06/13/cryptomonnaie-c...
- alephxyz 4y agoAnd now LP : https://www.lapresse.ca/affaires/entreprises/2022-06-13/cryptomonnaies/avenir-incertain-pour-celsius-network-qui-a-recu-des-millions-de-la-cdpq.php https://www.lapresse.ca/affaires/entreprises/2022-06-13/cryp...
- Sytten 4y agoBetter than 750m I guess, but with my napkin math its still 1200 old YC deals / 300 new YC deals which are most likely to have a better ROI than a crypto exchange. But la Caisse doesn't invest in small businesses, they want big deals to reduce risk (ironically).
- mjthrowaway1 4y agoThey could’ve invested in StableGains!
- ChainOfFools 4y agoI have no numbers to back this up but only an observation which I thought completely trivial until now, that of the hundreds of crypto people that I've interacted with since I first started dabbling with it in 2013, it always felt a bit odd, as someone who mainly lived and worked in the federal district in DC, how an outsized proportion of them - and especially ones that stand out as being the most ideologically strident type of crypto-bro - were French Canadians.
- numair 4y agoYou should call a securities lawyer and also the legal department of the pension, and threaten to sue. Whichever idiots have done this deserve to suffer some consequences — even if you sue and it gets tossed out, they will think twice before trying some sort of ridiculous nonsense like this again. Pensions are extremely difficult to pitch for any sort of deal, even when it’s safe and makes sense. There is definitely some sort of back-channel relationship that led to this deal. You need to figure out how this happened, because there’s likely to be more of this sort of corrupt junk in your pension’s portfolio. You should also question how economically benefiting from proof of stake mining has any place in any fund that purports to care about ESG (that applies to everyone!).
- JimmyRuska 4y agoMaybe they were offered more guarantees on their investment, or they already exited that position after a heads up. For Celsius, saying a major pension fund was a key investor was worth a lot.
- SoftTalker 4y agoIt's pretty obvious. Look at the history of big union pensions in the USA, e.g. the Teamsters.
- 908B64B197 4y agoI wonder if there's indeed grounds for a class action against those who made the due diligence work. Should it be found that they might not have acted in the fund's best interest or that there was some back-channeling the repercussions might be interesting. But your money is definitely gone. Now, on the other hand, forcing everyone to invest in that fund 10% of their earnings, considering the huge amount of risk they are taking and the very speculative nature of their investments... that sounds like something else that would be great to challenge in courts.
- ypzhang2 4y agoThere is a big difference in Canadian pension funds and US pension funds. Canadian pension funds are run more akin to a private equity firm. They invest directly in growth stage deals and therefore take commensurate risks like any other private equity firm. That means that they make bets with more asymmetric risks and balance their entire portfolio rather than staying at a specific risk band with all of their investments. They pay for professional staff commensurate with that model. A canadian pension fund's employees earn salary and bonuses comparable to a investment bank or private equity firm. You can't necessarily look at one off investments and have to look at return over time which is generally healthy and their funding ratio, which is generally much healthier than US pension counterparts. There is a reason the "Canadian Model" is held up as one of the ideal pension management models.
- stouset 4y agoThis sounds roughly equivalent to an actively-managed mutual fund. To anyone paying attention the past few decades, these have been widely discredited in favor of passive index funds. Why would this model be held up as the ideal, and by whom? Why would pensioners be better served by expensive and underperforming active management rather than more cheaply balancing risk through a pension manager picking a balance of index funds and periodically rebalancing? Perhaps I’m missing a crucial detail unique to pensions, but it just sounds like yet more expensive financial industry snake oil to me.
- dralley 4y agoI question whether the supremacy of index funds is a self-fulfilling prophecy. When vast quantities of your stock is demanded not because people think it's a good opportunity but because it was on a list, that demand will itself drive prices up, inflating the performance of the index fund over non-index peers.
- whiplash451 4y agoYou don’t even need to rebalance with a worldwide distributing index like VWCE.
- 4y ago