UK - The £1.45bn (US$2.89bn) Royal County of Berkshire Pension Fund is considering radically restructuring its investment portfolio, pushing over 40% of the fund's assets into alternatives.
The fund is considering diversifying into £70m emerging markets debt, £90m infrastructure, £70m global indirect property, £105m absolute returns strategies, £60m high yield debt, £50m active currency mandate and £150m in commodities.
Speaking to Global Pensions, Nick Greenwood, pension fund manager, dismissed claims it was a step into alternatives, saying the asset classes were "all well established investment opportunities."
He said following the latest actuarial valuation conducted last year by Barnett Waddingham, the scheme undertook a wide-ranging asset liability modelling (ALM) study, the outcome of which suggested the scheme diversify its asset classes.
"It's a risk diversification effort and there's no guarantee it'll go through," Greenwood added.
The funds current asset allocation is split between 70% equities (35% UK, 35% overseas), 19% bonds, 10% property, and 1% cash.
Greenwood said following the tender process, which could take between six months to a year, the fund may decide to change individual allocations depending on the state of the economy at the time and the potential returns.
Elsewhere, Bfinance and the London borough council of Hammersmith & Fulham have also announced the appointment of two new managers for dynamic asset allocation mandates worth £120m.
Baring Asset Management will invest approximately £90 million and Ruffer LLP will invest the remaining £30 million.
A council spokesman said: "We have worked with bfinance previously and have been pleased with the performance of fund managers selected through their process.
"The transparency of the audit trail they provide is also an important factor in our decision to work with them as we and our partners are tightly bound to follow the public procurement regulations."
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