While North Carolina is redeploying billions from its cash reserves into potentially higher-earning assets on behalf of its pension funds, it has no plans to invest directly in cryptocurrencies anytime soon. According to the state’s treasurer, the volatility just isn’t worth it.

“We have not found their risk and return to be a compelling match for what we're trying to do in the retirement system,” said North Carolina Treasurer Brad Briner at a video press conference on Monday.

Despite growing institutional interest in digital assets, Briner said that their volatility makes them unsuitable for the $139.1 billion pension system’s central goal of consistently making a six-and-a-half or seven percent return with little volatility.

“A highly volatile asset like Bitcoin as an example doesn't really help us do that,” he said, adding that these assets function mainly as a liquidity proxy, for which the state already has more predictable options.

The treasurer conceded that his office continues to study these assets with great interest. “But in terms of advocating for investing a large chunk of the pension system in these assets at the immediate moment,” he said, “I wouldn't hold your breath.”

Redeploying Cash

In January, the investment team rebalanced the portfolio, cutting its cash position from nearly $14 billion under the previous administration to about $4 billion by September. (The fund had a 37 percent allocation to cash and government bonds last year.)

“The biggest change in the asset allocation is the decline in the amount of cash in the portfolio,” Briner said.

Kevin SigRist, deputy treasurer and chief investment officer for the pension plans, added that the investment office has so far this year redeployed $6 billion of its large cash reserves into equities, investment-grade fixed income, as well as shorter-duration and asset-backed securities (both high grade and high yielding).

The North Carolina Retirement Systems returned approximately 12 percent year-to-date through October — this is after the plan ranked last across 50 state retirement systems for the three- and five-year periods ending June 2022.

“So, deploying that [cash] has been an enormous difference,” Briner added.

Since taking office in January, Briner has wasted no time overhauling how North Carolina’s public funds are managed. He told II in March that “outdated statutes” have hindered performance, so restructuring that model has been a top priority for the ACA finalist.

To modernize oversight, Briner secured legislation shifting fiduciary responsibility from a sole treasurer to a five-member board — a cornerstone of his campaign agenda. That board, the North Carolina Investment Authority, has set frameworks and policies to roll out in January. Meanwhile, the investment team has grown from 24 to 36 members, with plans for further expansion.