UK - USS considers £6bn move from equities to alternative assets

Along with the current university lecturers’ pay dispute, the proposed change, set for June 14th, could have important implications for the future cost of higher education in the UK. Peter Moon, USS’ chief investment officer, envisages an incremental increase, with £1.5bn being invested into other asset types by March 2008.

Moon says the aim is not primarily to reduce risk through diversification but to achieve returns similar to those in equities by investing in uncorrelated asset classes. At recent stock market values, Moon says, a 20% move into alternative assets would be worth about £6bn. Such a huge shift, he adds, would be difficult when so many other pension funds are also diversifying into alternative assets at the same time.

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