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Lewisham considers alternative assets

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UK - The £505m (€752m) London Borough of Lewisham pension fund is the next in line planning to go into alternative investments.

Following a strategic annual review by the fund's investment consultant Hymans Robertson, it was decided to make changes to the fund's investment structure, which may see the scheme go further down the alternative route.

"The Lewisham Fund has noted the options for possible investment in currency, hedge funds and commodities, but is pursuing its current asset allocation, with some minor amendments," said a spokeswoman for the local London authority.

The fund confirmed the fund's UK equities managers Capital International and UBS Asset Management both are behind their targets; however, they will only be "formally" assessed next year.

Due to the poor performance however the fund is also looking at the allocation of 42% in UK equities and 27% overseas equities, which in future is planned to be equally split between the two asset classes.

The spokeswoman denied reports of a shake-up, saying: "The strategic asset allocation that was set in 2003 will remain in place. We appointed our managers in 2004 with a three-year mandate and we are expecting to stick with these managers for the full term."

As part of the recommendations agreed by the pensions investment committee on September 14, Lewisham is also looking at new tactical asset allocation (TAA) funds and considering a £5m allocation to UBS's Market Absolute Return fund and £2.5m to its Currency Absolute Return fund from UBS's existing bond portfolio, the spokeswoman said.

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