Strathclyde Pension Fund, Glasgow, Scotland, invested or committed a total of nearly £850 million ($1.2 billion), said investment committee documents.
The £15.4 billion pension fund hired Babson Capital Management and Oak Hill Advisors to run £300 million and £150 million, respectively, in multiasset credit allocations. The pension fund launched a search in September as a result of a decision in March 2015 to reduce equity exposure and create a more diversified portfolio.
The multiasset credit allocations form part of the pension fund's plans to increase its allocation to short-term enhanced yield strategies to 15% of total assets from 7.5%. The objective of the allocation is to deliver an absolute return higher than cash or short-term bonds, with a high degree of predictability, the documents said.
Also in September and as part of the short-term enhanced yield allocation, the pension fund launched an invitation-only search for private debt funds to run a total £300 million. Documents showed the fund committee approved commitments of £150 million each to Alcentra Clareant European Direct Lending Fund II, and in Babson Global Private Loan funds.
Within its direct investment portfolio, the investment committee committed an additional £50 million to Pensions Infrastructure Platform's strategies. It approved the commitment to the PIP's Multi-Strategy Infrastructure Fund, investing in U.K. infrastructure assets with inflation-linked cash flows. Strathclyde — a founding investor in the not-for-profit infrastructure fund, launched by a number of U.K. pension funds — has already committed a total £70 million to PIP strategies.
The committee also approved a £25 million additional commitment to its existing £50 million commitment to the Clydebuilt Fund, a real estate fund managed by Ediston Real Estate; and approved a £20 million commitment to Scottish Equity Partners V, investing in sectors such as Internet consumer companies and energy efficiency.
Executives at the pension fund could not be reached for comment by press time.