UK - Lincolnshire County Council has instigated a major shift in the asset allocation of its pension fund as the planning to invest between 10-15% of its assets in a single portfolio of alternatives while Essex is looking to invest in infrastructure.
A tender notice has been issued which states between 10-15% of the fund's assets will be invested in this portfolio from October 2010, with an initial investment of £100m, and "may or may not include the existing private equity investments", which to the end of March 2009 were worth 8.6% of the scheme's assets, against a 5% strategic benchmark.
The £910m pension fund listed its asset allocation to the end of March 2009 as 64.8% equities, including private equity, along with 20.8% fixed interest, 13.7% held in property and 0.7% in cash. This compared with a strategic allocation of 70% equities, 18.5% fixed interest and 11.5% property.
The mandate requires appointed authorities to manage "a diversified portfolio of alternatives, taking into account the strategic and tactical asset allocation, whilst having regard to the opportunistic timing of investments into different asset classes".
Assets will be benchmarked to 3-mth LIBOR with rolling 3-yr performance expected to deliver 3-4% net of fees.
JLT Actuaries and Consultants, which is an advocate of diversified alternatives funds, is managing the tender process on behalf of Lincolnshire, so open tenders must be submitted to JLT by 2 June 2010.
Elsewhere, Essex County Council is also tapping into its pension fund's strategic asset allocation as the £2.2bn pension fund is seeking to invest £50m in global infrastructure.
Hymans Robertson, as its current investment consultant, is managing the tender process to find a suitable fund of funds manager, either on a pooled fund or on a segregated mandate basis.
Essex has specified it will only invest in unlisted infrastructure and could appoint more than one manager should it be appropriate.
Data available in the last annual report and Statement of Investment Principles showed the Essex pension fund allocated 70% of its assets to equities, including 4% in a "shareholder activism" investment, along with 15.5% in fixed interest, 12% in property and 2.5% in infrastructure.
Little more information is available, so should be sought from Hymans Robertson and tender submissions must be presented by 15 May 2010.