UK- Railpen, the UK railway £13bn (e20.3bn) pension scheme, is to increase its allocation to private equity from 2% to 5%, taking the level of investment from around £400m (e626m) to £750m (e1.17bn).
Says Peter Murray, chief executive at Railpen: “the fund has included private equity for over 10 years, which has been highly successful, and in the long-term it will provide a higher performance level than quoted equities.”
Murray expects the entire commitment to private equity to take up to four years.
Nine managers currently run the quoted equity portfolios and each will lose an equal proportion of their mandate.
Mandates for UK, US and European private equity portfolios and venture capital funds have already been awarded.
The increased allocation to private equity will be in line with suggestions made by both UK prime minister Tony Blair and the Myners report.
Railpen currently invests around £8.5bn in equities, £800m in real estate, £400m in private equity and the remainder in international bonds.