As George Soros said ”Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes.”
Every once in a while, it is fun to zoom out and take a look at the world outside crypto, which is, to put it mildly, quite immense, and which fact, to put it not so mildly, sadly lost on quite a few crypto arrivistes.
Last week, in some of the research we were looking into, we stumbled upon some interesting analysis on the state of global pension plans (the pension plans of the developed world that can afford such luxuries at any rate). The 30,000 foot view of course is fairly well known - better access to increasingly better healthcare resulting in populations living longer across most of the developed world, combined with inadequate savings for retirement, and high personal and governmental debts.
The state of the global pension funds seems to be growing worse with every passing year. Pension funds are the 800-pound gorillas of the institutional investment universe, with over $40 trillion in AUM. By comparison, the total capital managed by hedge funds globally stands at $3.2 trillion. Pension fund managers are highly risk averse by default, as they need to meet future obligations (pension payouts) with a high degree of certainty. For this very reason, pension fund investments are heavily skewed towards ‘safe’ assets such as bonds and stocks, with a portion invested in a catchall bucket termed ‘alternatives’; this could contain anything from tracts of forests in Canada, Lithium deposits in Argentina to traditional venture capital, private equity, real estate and other such traditional alternatives.