J Sainsbury Pension Scheme, London, plans to double its alternatives exposure to 20% of its total £3.4 billion ($6 billion) in assets, said Chris Armitage, investment controller. By the end of the year, fund officials plan to raise the real estate allocation to 8% to 10% from 4% currently; raise private equity to about 6% from 3%; and raise hedge funds to about 6% from 3%.
Scheme officials want to diversify to asset classes not correlated to the plan's equity exposure, Mr. Armitage said.
Funding will come from reducing the scheme's equity exposure to 40% from about 55% in the next several years, Mr. Armitage said. The additional five percentage points will probably be shifted toward fixed income, although details have not been determined.