Canada’s second-largest pension fund Caisse de dépôt et placement du Québec (CDPQ) is exploring legal options over bankrupt crypto lending firm Celsius and will no longer invest in crypto firms, it said on Wednesday.
CDPQ’s statement came as the fund recovers from its failed investment in New Jersey-based Celsius, which filed for bankruptcy in July less than a year after it received an investment of $150 million from the fund.
“We will preserve our rights and explore legal options,” CDPQ Chief Executive Charles Emond said on an earnings conference call, adding the fund had focused on the future potential of Celsius instead of present performance.
Emond defended the fund’s investment and said it had carried out “extensive due diligence” on the company. “We were interested in seizing the potential of blockchain technology, but clearly things did not go as expected,” he said.
CDPQ, which manages the pensions of several public sector bodies as well as other investments, reported investment losses and a drop in net assets for the first six months of the year, as aggressive rate hikes triggered turbulence across stock and bond markets.
As of June 30, net assets for the fund stood at $392 billion, down from $419.8 billion at the end of last year, it said.
CDPQ’s investments lost 7.9% in value during the period, compared with a 5.6% return in the same period last year, when easy fiscal policies propelled stock prices to record highs.
“The first six months of the year were very challenging,” Emond said, adding that the unstable conditions would persist for some time.
Last week, Canada Pension Plan Investment Board also reported a drop in net assets in the first quarter as market turmoil weighed on returns from its funds.