The Ontario Teachers’ Pension Plan is facing losses from an investment in a cryptocurrency exchange that filed for bankruptcy on Nov. 11.
The pension fund invested a total of US$95 million in FTX International, a Bahamas-based exchange, which was valued at US$32 billion in 2021. In October 2021, the Ontario Teachers’ invested US$75 million in FTX, followed by US$20 million in January 2022.
Earlier this month, the company faced a liquidity crisis. After a sharp drop of cryptocurrency prices, account holders withdrew US$6 billion.
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In a press release, the Ontario Teachers’ said it made the investments to gain small-scale exposure to an emerging area in the financial technology sector. “Naturally, not all of the investments in this early-stage asset class perform to expectations. . . . While there is uncertainty about the future of FTX, any financial loss on this investment will have limited impact on the plan, given this investment represents less than 0.05 per cent of our total net assets.”
In other news, the Caisse de dépôt et placement du Québec is putting $15 million into a credit vehicle for an electric vehicle manufacturer.
Co-funded with Finalta Capital, the $30-million credit scheme is designed to provide Lion Electric Co., a Quebec-based electric buses and garbage truck manufacturer, access to flexible credit. The company will draw on it to pay down previous debts and finance a growth strategy.
In a press release, Marc Cromier, executive vice-president and head of fixed income at the Caisse, said the investment was part of a broader capital solutions strategy. “We are delighted to contribute to funding, put in place with the expertise of Finalta Capital, that is adapted to the company’s operational reality and highly tailored to its current needs.”
Despite being the world’s leading manufacturer of electric school buses and having pending orders worth about $575 million, the company has struggled to attract investors on the TSX. After trading at above $24 per share in June 2021, its shares currently trade below $4.80.
Read: Caisse adds financing to Quebec-based infection control company