UN pension to move into PE, infrastructure

The $35bn United Nations Joint Staff Pension Fund will start investing in funds of hedge funds and private equity. It will also expand its real estate portfolio, currently valued at around $1.8bn, to include infrastructure, agricultural land and timberland.

The United Nations Joint Staff Pension Fund (UNJSPF) is expanding its alternative investments with plans to move into the hedge fund of funds and private equity space – and grow its real estate portfolio.

The $35 billion pension said it received approval last year to “incorporate” hedge fund of funds and private equity investments into its portfolio, as well as expand its real estate allocation to include infrastructure, agricultural land and timberland.

The pension invests almost 90 percent of its portfolio in equities and bonds, according to the UNJSPF's website. However, in a tender document on the UN’s procurement website, the fund managers said at a meeting of the pension’s investment committe last year, the representative of the Secretary-General agreed to increase the scope of the investments.

“The fund,” the document said, was generally limited to a small number of large holdings, however as “one of the most globally diversified funds in the world … the fund is committed to finding sound investment opportunities in emerging markets.” The website continued that the fund was now seeking consultants to advise on the asset class expansion.

The UNJSPF fund, as of 30 September 2008, was valued at $35.4 billion, a decrease of 11 percent since June last year, according to its website. As of September, the fund allocated 5.2 percent to real estate, compared to 56.1 percent to equities, 32.8 percent to bonds and 5.9 percent to short-term investments.

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