The Contra Costa County Employees’ Retirement Association (CCCERA) is investing $100m (€90.9m) in a natural resources separate account.

The pension fund has proposed a change for its investment with Commonfund Capital, awarding the manager a separate account mandate instead of investing in its Natural Resources Fund X, according to a board meeting document.

The CCCERA previously committed $50m to Commonfund’s Natural Resources Fund IX. 

The pension fund said it saw better alignment with LP/GP interests with the switch of vehicle, as well as the opportunity to widen its investment opportunity set.

Commonfund is to invest CCCERA’s capital in primary fund investments, secondaries and co-investments in timber, agriculture, renewable energy and infrastructure.

Although the fund will be open to opportunistic investments, 50-60% of the capital will target primary investments.

The separate account has a 7% preferred return for the pension fund.

The amount planned for co-investments and secondaries is much higher than planned for Fund X, which had a 25% allocation to the strategies.

Commonfund, making a $200,000 co-investment, is expected to invest the separate account capital globally over three years. 

The separate account will last for 12 years, with an additional one-year extension option.

The CCCERA’s investment consultant, Verus Investments, believes a strategic, long-term allocations to natural resources can provide inflation protection, a differentiated source of returns and portfolio-level diversification.