The Falkirk Council Pension Fund has remained overweight to equities despite increasing its exposure to alternatives, including investments in social housing and infrastructure.
The £1.8bn (€2.4bn) Scottish local government pension scheme (LGPS), which returned over 13% last financial year, said it had recently completed its first infrastructure investment through a joint mandate with Lothian Pension Fund.
It has earmarked a total of £30m for the venture with the fellow local LGPS, of which £2.75m had so far been committed to in a renewable energy fund overseen by Ancala Partners.
The allocation has seen Ancala able to acquire Green Highland Renewables, owner of small-scale hydro power projects.
An investment in social and affordable housing, which forms a standalone asset class outside of its 8% target allocation to alternatives, has also already seen over half of the £30m commitment drawn down by Heathstone Investments.
Of that, £15m has been drawn down to invest in short-term debt to support social housing constructions and a further £1.8m to support the building of affordable housing.
Falkirk added that its investment would eventually help build 191 social housing units across its catchment area.
But according to the fund’s 2014-15 annual report, it said both commitments had been unable to lower its equity holdings below the 60% envisaged in its strategic asset allocation.
“In spite of the significant allocation to alternatives, the Fund’s actual equity allocation [of 63%] has continued to exceed its strategic asset allocation due to the very strong performance of global equity markets over the past three years.
“The Fund’s strategic allocation to all asset classes is being re-appraised in the ongoing review of investment strategy.”