UK - The pension funds of the London Boroughs of Islington and Brent are considering getting into alternative investments such as real estate, private equities and hedge funds – aided by consulting firm Mercer.
The 478 million-pound (708.3 million-euro) Islington scheme said it is “very close” to awarding Morley Fund Management Ltd a 25 million-pound real estate brief.
The fund is also engaged in a ‘negotiation process’ with Standard Life Investments and Pantheon Ventures for two private equity fund-of-funds mandates worth 10 million pounds each.
An official told IPE the fund had pledged five percent of its portfolio to property and four percent to international private equities, the money is coming from existing resources but the official declined to elaborate.
Islington had previously made small investments in the two asset classes. The asset allocation had been altered following a review of the pension fund’s asset-liability strategy.
Mercer Investment Consulting assisted Islington and will help the 343 million-pound London Borough of Brent Pension Fund, which has tendered a 17 million-pound fund of hedge funds brief.
It is the pension fund’s first investment in the asset class and the money will come out of the fund’s equities portfolio.
Asset managers have time until September 29 to return their tendering documents. The fund is likely to make an appointment before the end of January 2005, said Robert Howie, head of hedge funds research at Mercer.
Mercer Human Resource Consulting assisted the 800 million-pound Warwickshire County Council Pension Fund in its recent revamp of asset managers.