GERMANY - The Bayerische Versorgungskammer (BVK), Germany's largest pension fund, is about to award its first timber mandate and has just started its first infrastructure fund.

Daniel Just, chief investment officer (CIO) of the Munich-based fund, told IPE the fund wants to invest around 1% of its €40bn assets in timber and has just started a 2% infrastructure investment.

Speaking in Frankfurt at the Pension Fund Investment World Germany 2008 conference, Just said the move was part of a new strategic asset allocation started in 2005, in which the fund has systematically been building up its alternatives investments.

"Timber and infrastructure are part of this, but we want to grow into these classes slowly," said Just, who added timber exposure will be gained via a fund-of-funds strategy.

BVK will host a beauty parade of asset managers for the new timber allocation later this week.

The new investments will be made possible by reducing the European equity portfolio - a "strategic decision" for the fund.

Just also mentioned BVK wants to expand its private equity investments, though has a more cautious outlook on hedge funds.

BVK's hedge fund investments, which include multi-strategy, commodities and currencies, should be examined, said Just, though no alterations are planned.

The hedge fund quota currently lies at 5%.

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