Missouri pension takes hit from FTX crackup

Missouri’s system says its exposure came through an undisclosed co-investment fund.

Missouri State Employees’ Retirement System took a hit in the collapse of crypto currency exchange FTX, with the small exposure it garnered through a private equity co-investment fund.

Several firms like Thoma Bravo and Insight Partners invested in FTX through a financing round in 2021. Ontario Teachers’ Pension Plan also committed $95 million to FTX through its venture growth platform, according to a note on the system.

The investments were unusual in that private equity generally avoids early bets on newer technology as they prefer backing companies with established cash flows. Private equity hasn’t yet gone big into crypto.

MOSERS chief investment officer TJ Carlson said the retirement system had an $800,000 to $1 million exposure to FTX through the co-investment fund. Carlson did not disclose the name of the fund at the meeting. The co-investment fund had a 3 percent exposure to FTX, Carlson said.

Carlson discussed the exposure to FTX at the system’s board meeting on November 17. Affiliate publication Buyouts watched a webcast of the meeting.

“We don’t expect any kind of material impacts for the FTX news. It was included in a really small portion of one of our co-investment funds,” Carlson said.

FTX filed for bankruptcy on November 11 due to a flood of customer withdrawal requests the exchange was unable to meet. Founder and former CEO Sam Bankman-Fried resigned after FTX collapsed.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” wrote John Ray, who now heads FTX as it goes through the bankruptcy process.