The €14bn pension fund for French civil servants (ERAFP) has asked local regulators to soften rules towards alternative asset classes, allowing it to make its first investments in infrastructure.
Speaking at the first IPE/Sterling Capital Partners infrastructure conference in London, Jean-Michel Horrenberger, deputy chief executive at ERAFP, said the fund was currently “not allowed by law” to invest in asset classes such as infrastructure.
He added that the pension fund, currently more than 70% invested in bonds, cannot invest in open-ended mutual funds, is restricted when investing in non-listed securities and must tender mandates publicly.
Horrenberger said ERAFP’s board of directors asked French regulators at the beginning of this year to soften the regulatory constraints to allow the scheme to invest in alternative asset classes.
According to him, ERAFP expects local regulators to make their final decision and soften the rules in the coming months, which would enable the fund to proceed with its first investments in infrastructure.
In 2011, the French pension fund was already granted the authorisation to invest in real estate and timber assets.
ERAFP currently invests 74% of its portfolio in fixed income, 23.5% in equities and 1.5% in real estate.