The investment panel of the North Yorkshire Pension Fund, Northallerton, England, recommended hiring Permira and BlueBay Asset Management to manage a £120 million ($156 million) allocation to private debt.
An investment committee meeting document, dated Sept. 15, said the £2.4 billion pension fund’s 5% allocation should be equally split between the two money managers.
North Yorkshire County Council’s spokeswoman said that the reason for choosing a private debt manager was the fact that alternative assets offer better returns than bonds but lower risk than equities.
“The decision was taken to further diversify (the) portfolio,” she said.
Should the investment committee agree to go ahead with the recommendation, “funds will need to be found from elsewhere,” the document said. At the time of the search, Tom Morrison, head of commercial and investments at North Yorkshire County Council, said the allocation would be funded through rebalancing, with no decision yet made about a specific funding source.
The pension fund launched a search in January, with assistance from consultant bfinance.