The £21.2bn (€23.7bn) Strathclyde Pension Fund plans to invest 2.5% of its portfolio in global infrastructure as it looks to lessen its exposure to equities.
According to an investment strategy report presented to trustees last month, the pension fund will initially look at open-ended infrastructure funds before turning to closed-ended vehicles.
The UK’s biggest public pension fund finished 2017 with 57.5% of its portfolio in equities. It began reducing its stock market exposure last year and is moving to a more diversified strategy that includes UK infrastructure, with a focus on renewable energy.
Strathclyde plans to invest in infrastructure within its “long-term enhanced yield” silo, designed to provide inflation protection as well as income.
“In the first instance this should look at open-ended pooled funds as these can achieve fairly rapid deployment of capital, good visibility of existing assets and a stable long-term allocation with the option of some liquidity,” the report said.
“Consideration should then be given to closed-ended funds which could provide a long-term yield and a more specific focus on individual market segments in addition to core holdings.”
The allocation shift is scheduled to be implemented by 2020.