Canada’s Ontario Teachers Pension Plan (OTPP), Canada’s third largest pension fund, might be made the wrong decision to invest in FTX. OTPP invested an untold amount in FTX in 2021, when the FTX valuation was US$ 25 billion
- OTTP has made a total investment of US$ 75 million
- Ontario Teachers Pension Plan got an RoI of 11.1%
What happened between FTX and Binance?
FTX EXchange is one of the leading cryptocurrency exchange derivatives, Sam Bankman- Fried founded FTT in 2018, and Changpeng Zhao founded Binance in 2017, the largest online cryptocurrency trading platform.
FTT is the native cryptocurrency of FTX, which is used to pay the transaction fee by traders. In 2021 Binance stack was sold to FTX by Mr. Zhao, and Mr. Bankman- Fried made payment partially in FTT tokens.
Binance announced on November 6 that it would sell all the FTT’s tokens; as a result, FTX token value started decreasing and the FTX token holders and all the traders fearfully started withdrawing, which became the main cause of FTX demotion. This is how ‘FTX Liquidity Crunch Begins.
After this turmoil between FTX and Binance, they were engaged in a deal where Binance told FTX that he would buy FTX and then backed out of the deal, as per the record of November 10, FTX token value went down to 58% on one day.
OTTP’s return on investment in the last few years
According to Ontario’s Teacher Statement on FTX, “In October 2021, Ontario Teachers’ invested a total of US$75 million in both FTX International and its US entity (FTX.US). In January 2022, we made a follow-on investment of US$20 million in FTX.US. These investments were made through our Teachers’ Venture Growth (TVG) platform, alongside a number of global investors, to gain small-scale exposure to an emerging area in the financial technology sector.”
In 2021 OTTP got an 11.1 % return on investment and made its capital worth $241.6 billion. Ontario Teacher’ says about their public and private equity before this market turmoil that OTTP’s public equity gained 9.0% over investment, and their public equity grew 29.0%.
Ontario Teachers’ Pension Plan (OTTP) got a high return on investment in 2020 and 2021. Every market has its behaviour where profit and loss are the outcomes. Profit and Losses are the market results every investor has to bear; OTTP is doing the same. It can be said that it’s not your day OTTP.