Virginia Government Aims to Create Blockchain Study Group

Virginia lawmakers are looking to form a study group dedicated to blockchain research and its impact when implemented across government services.

Should House Joint Resolution 153 come to fruition, a 13-member joint subcommittee (eight legislative members, four non-legislative members, and one ex officio member) would be established “to study the potential implementation of blockchain technology in state recordkeeping, information storage, and service delivery,” the resolution reads.

Additional topics the proposal seeks to pinpoint are opportunities and risks the cryptocurrency technology present to state recordkeeping, different types of blockchain and the feasibility of implementation, how related projects and use cases other states and nations are developing can apply to Virginia; the case for early blockchain adoption stimulating the state’s information technology industry (which has the second-highest mass of information technology workers in the US, according to the document); and what changes to current Commonwealth laws can be made to support blockchain.

The Office of the Clerk and the House of Delegates will provide administrative staff support for the group, with the Division of Legislative Services providing legal, research, policy, analysis, and other services the group requests. The Virginia Information Technologies Agency will provide the joint subcommittee technical assistance, with all Commonwealth agencies to assist the group upon request.

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The study group is unlikely to receive a budget per-se, but instead will be privately funded via a cryptocurrency wallet provided by the House of Delegates.

For the 2018 interim, the joint subcommittee will hold four meetings, completing them by November 30.

Once completed, the chairman must submit an executive summary of the group’s findings and recommendations to the Division of Legislative Automated Systems by the first day of the 2019 General Assembly regular session. According to the proposal, the executive summary “shall state whether the joint subcommittee intends to submit to the General Assembly and the Governor a report of its findings and recommendations for publication as a House or Senate document.”

The executive summary and report will be posted on the General Assembly’s website.

Tags: Blockchain, Information Technology, Virginia

Of 809 institutions studied, endowments showed much higher rates of return for the 2017 fiscal year, averaging 12.2%, up from -1.9% in fiscal 2016, and 2.4% from fiscal 2015, according to the 2017 NACUBO-Commonfund Study of Endowments.

“This obviously reflects continued strength in public equity markets. US equity markets have been positive for each of the last nine calendar years, and this year, we saw really complementary strength in global markets as well, [especially] EMEA and emerging markets,” said Catherine Keating, president and CEO, Commonfund.

Five primary investment categories were tracked in the study, with only fixed income, at 2.4%, showing a lower return in FY2017 than FY2016’s 3.6%. Non-US equities, which produced last year’s lowest return in the post-Brexit environment at -7.8%, generated this year’s highest return, at 20.2%, followed by US equities, which returned 17.6% compared to last year’s -0.2%. Alternative strategies turned in a 7.8 % return versus -1.4 % in FY2016, while short-term securities/cash/other returned 1.4 % compared with last year’s 0.2 %.

Of alternative investment strategies, private equity, defined as LBOs, mezzanine, M&A funds and non-US private equity, provided the highest return, at 11.7%, followed by distressed debt and venture capital, which generated returns of 8.9%. and 8.4%, respectively.

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But endowments’ 10-year average annual returns dipped to 4.6% from 5% in 2016, far below the common endowment target rate of 7% to 8%. One factor causing the dip: the 10-year average no longer includes the 17.2% return rate from 2007.

The lower rate “reflects the continued impact of the financial crisis in 2008 and 2009 on endowment returns,” said Keating, “and it also reflects, interestingly enough, a fair amount of volatility in the last decade. The decade had five years of double-digit returns, and four years where returns were either negative or flat.

But if the 2008/2009 post-crash rates weren’t factored in, five of those eight years had positive double-digit returns, “so, there’s no doubt that the recovery from the financial crisis has been strong and positive,” said Keith Luke,

The study included 809 institutions representing $566.8 billion in endowment assets. The average US endowment was $700.7 million, and the median endowment was approximately $127.8 million. 44% of study participants had endowments that were $100 million or less.

Tags: 2017 NACUBO-Commonfund Study of Endowments, Aquity, Endowments, NACUBO, Private Equity