Santander’s £9.5bn (€12.9bn) UK pension fund is to grow its exposure to emerging alternatives managers, acting as the cornerstone investor in a new fund launched by Strategic Capital Investors (SCI).

The bank’s scheme has committed $125m (€114m) to SCI’s Strategic Capital Fund, which invests accelerator capital into emerging hedge funds.

The SCI fund has already completed its first placement, a three-year, $75m investment into a fund managed by London-based hedge fund manager John Street Capital.

Antony Barker, CIO of the Santander UK Group Pension Scheme, said that, in addition to acting as a cornerstone investor in SCI’s fund, it had acquired a significant minority stake in the company.

He declined to specify the size of the stake, only confirming it was more than 10% of SCI’s shares and allowed the pension fund to sit on the board as an observer.

The strategy continues Santander’s decision to seek direct exposure to managers, rather than investing in hedge funds, after it last year committed $100m to Dyal Capital Partners.

The New York-based manager acquires minority stakes in alternative asset managers.

Barker said the SCI’s approach was the “next evolution” of Dyal’s strategy.

“We will gain if the underlying hedge fund managers grow their AUM, or if SCI brings additional investors onto its platform,” he said.

The investment by SCI’s fund will see it benefit from the revenue generated by John Street Capital, and any further managers to receive acceleration capital.

Barker argued the strategy made “an awful lot of sense”.

“The definition of a market-neutral fund is that the manager makes 2% whether the market goes up or down, and so having a share of that fee seemed like quite a good deal.”

The pension fund saw returns of 17.7% for the financial year ending March 2015.