NETHERLANDS - Pensioenfonds TNO, the €2bn pension fund of the applied scientific research institute, said it is considering diversifying its portfolio further by investing in commodities.

Chief investment officer Mark Burbach told IPE today his fund's portfolio has already been tailored to diversify the investments.

The fund has not yet directly invested assets in commodities, but Burbach said the fund is researching to establish whether creating a separate commodities portfolio would fit with this focus on diversification.

As part of its strategy, the fund already invests 14% of assets in hedge funds and private equity - a considerable allocation to such illiquid assets for a medium-sized scheme.

Burbach said: "8% is spread across a private equity portfolio of fund of funds and direct funds in venture capital and buyouts, while 6% is invested in fund of hedge funds."

He added; "We have two fund of hedge fund managers and this allocation is mainly meant to function as a counter weight to the total of the portfolio, so for stability."

Burbach also said his fund is looking at other alternative investments such as clean energy or timber, investments currently popularised by major Dutch funds such as ABP and PGGM, if they deliver the right returns.

"Because of our size, we cannot undertake these kinds of strategic investments, but we keeping an eye on them," Burbach said,

The fund last month announced from January next year BlackRock will act as the fund's lead overlay manager.

BlackRock is currently compiling an investment year review of TNO, which the fund will consider in December, however Burbach does not expect any dramatic changes to his fund's investments.

Topics