Royal Borough of Greenwich Pension Fund, London, is searching for managers to run a £100 million ($154 million) allocation to diversified alternatives strategies.
The £1.06 billion pension fund said in a notice filed with European procurement website Tenders Electronic Daily that it is looking to invest in one or more diversified alternatives strategies, as part of a move to further diversify exposure to growth assets.
The portfolio may include, but is not limited to, active currency, commodities, emerging markets debt, global tactical asset allocation, hedge funds, high-yield bonds, infrastructure, insurance-linked securities, private equity, real estate, and timberland and agriculture strategies.
The intention to appoint a manager for diversified alternatives was outlined in the pension fund's 2015 financial year annual report. In March, the fund approved a new strategic asset allocation, which includes a 10% target investment in diversified alternatives.
A spokesman for Royal Borough of Greenwich said this is the pension fund's first allocation to diversified alternatives. “The portfolio is being restructured to ensure that it is fully diversified across a range of growth assets, which will reduce risk while ensuring the fund continues to achieve its 6.1% per annum growth target,” said the spokesman in an e-mail.
The spokesman said the allocation will be funded from existing equity portfolios. U.K. equity exposure to expected to be reduced to about £150 million. At March 31, U.K. equity allocation was £354 million.
Executives at the pension fund expect to conclude the search early in the New Year.
The RFP is available on TED. Proposals are due Dec. 15.