London’s Greenwich local authority fund has tendered a £100m (€140m) alternatives mandate as part of an overhaul of its asset allocation towards a more diversified portfolio.

The £1bn fund for the Royal Borough of Greenwich said it was planning to invest in one or more diversified alternatives funds via segregated mandates.

Any fund should have access to a “broad” range of alternative assets, the scheme added, providing a non-exhaustive list of a dozen alternative asset classes into which any selected fund could invest.

It said managers would be able to pitch funds that included exposure to active currency management, commodities, emerging market debt, global tactical asset allocation strategies and hedge funds, as well as high-yield bonds, insurance-linked securities and private equity.

Greenwich said the selected funds could invest in real assets as well, such as infrastructure, real estate, timberland and agriculture.

It said the expected return for any fund would be 3-5% above the three-month sterling LIBOR rate.

Managers have until 14 December to apply for the mandate, which could be awarded for up to a decade.

The new mandate forms part of the local authority fund’s overhauled asset allocation, which saw it decide in February to allocate 10% of assets to diversified alternatives, and a further 10% towards a multi-asset strategy.

The new asset allocation has seen a slight increase in the overall equity allocation – previously 45% of the fund’s assets divided evenly between UK equities and overseas equities.

Instead, the fund is now targeting a 15% exposure to UK equities and a 35% exposure to overseas equities, split across a smart beta allocation, an actively managed emerging market portfolio and a passively managed global equity portfolio.

Exposure to real estate and fixed income remains stable at 10% and 20%, respectively, while a 5% private equity allocation has been removed in favour of the 10% diversified alternatives mandate and higher listed equity allocation.

The changes also saw the fund end a 20% strategic allocation to absolute return products.