Devon County Council Pension Fund, Exeter, England, has committed £40 million ($65.7 million) to Aviva Investors infrastructure strategies, confirmed Mark Gayler, assistant county treasurer at Devon County Council.
The commitment is part of a recent increase in the £3 billion pension fund's allocation to infrastructure investments. According to the fund's most recent annual report, as of March 31 it had a 1.1% allocation to infrastructure, with target allocation of 2%. According to the report, “Following the end of the financial year, the Investment and Pension Fund Committee agreed to increase the target allocation to infrastructure from 2% to 4%, by reducing the total allocation to fixed interest and cash from 18% to 16%.”
Half of the £40 million has been committed to Aviva Investors' Returns Enhancing and Liability Matching Infrastructure Fund, which focuses on projects across the U.K. The other half has been committed to the Returns Enhancing and Liability Matching Ground Rents Fund.
“Inflation is one of the key risks faced by pension funds,” Mr. Gayler said in an Aviva news release. “The Devon Pension Fund's investment in the Aviva Investors REaLM funds will provide protection against U.K. inflation, whilst offering diversification at relatively low risk.”