Luxembourg’s €14.3bn pension reserve fund has hired two managers to oversee its €500m push into global real estate.

The Fonds de Compensation commun au régime général de pension (FDC) announced its board of directors had settled on Aviva Investors and CBRE Global Investment Partners as its inaugural managers, after first tendering the vacancies in August.

Each manager will be handed €250m for an unlisted global real estate mandate, part of FDC’s attempt to meet its 3.5% strategic allocation to property outside the Grand Duchy.

In addition to appointing Aviva Investors and CBRE, UBS Asset Management has been appointed as standby manager, should either of the two managers seeded need to be replaced.

Overall, the fund has a 8.5% strategic allocation to property, but currently falls far short of its 5% domestic target and at the end of 2014 only had €247m in Luxembourgish real estate.

A project that will see it approach its 5% target, the ’Cité de la sécurité sociale’, is currently under development, and will see the construction of an office complex to house the domestic social security office. 

The fund decided last year to build up its global exposure through holdings in real estate funds to further diversify its portfolio and increase exposure to inflation-linked assets.

To date, the portfolio, which returned 10.96% last year, has largely been split between fixed income – accounting for nearly 60% of assets – and equities (38.4%).