Railpen Dials Up Diversified Allocations Amid Strategy Review

Railpen, a U.K. pension fund managing around GBP37 billion (USD46 billion) in assets, is positioning for greater volatility in the coming years, particularly in an asset-liability context where inflation is an important risk to manage. John Greaves, head of investment strategy and research, said the pension fund has been reviewing liability hedge ratios and increasing allocations to less equity sensitive asset classes, including equity long/short and trend within the fund’s diversified allocation. Railpen has also been increasing client allocations to credit and real assets, which have historically fared better in inflationary conditions than equity. This comes as pension plans globally continue to battle with inflation.