Asset manager BlackRock has announced the launch of the UK Strategic Alternative Income Fund, which will provide UK defined benefit (DB) pension schemes with access to a range of alternative income sources in one portfolio.
The fund will invest in infrastructure debt, renewable energy, real estate debt, long-lease property and direct lending in the UK through a mixture of funds, bespoke mandates and direct transactions. It aims to deliver long-term stable cash flows and targets a net annual yield of 5% over the investment horizon.
The fund arrives at a time when pension schemes are increasingly seeking alternative income, as yields from traditional asset classes remain scarce.
'UK pension schemes are increasingly embracing less liquid strategies to enhance returns, but these types of investments are not often easy to exploit,' commented Andrew Stephens, head of Intermediated Clients for the UK. 'By creating a single portfolio that provides exposure to a range of alternative income sources, we are helping schemes access these markets more easily while also providing diversification.'
The fund is semi-open ended and investors are provided with windows of liquidity every year following an initial four-year lock-in.
