London pension fund appoints Alpha Real Capital to manage assets

The £1.2 billion ($1.6 billion) London Borough of Hammersmith and Fulham Pension Fund (LBHF) has chosen Alpha Real Capital to manage 5 percent of its assets under management, through a subscription to the firm’s Index Linked Income Fund.

LBHF said it made the decision to invest 5 percent of its assets to commercial ground rents with Alpha as part of a restructuring of its inflation-protection allocation.

ILIF invests in U.K. commercial ground rents with the aim of providing investors with secure, inflation-linked, long-term income and associated capital growth.

“Commercial ground rents provide pension schemes with very long dated inflation-linked, investment-grade quality cash flows to help meet liabilities whilst also generating 4 to 5 percent p.a. more than comparable index-linked gilts,” said Boris Mikhailov, head of client solutions at Alpha Real. “We see it as a natural asset class for local government pension schemes — they have a long-term inve