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Colombian pension funds given green light to invest in PE and RE

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bogota-221345_960_720Colombian pension funds will soon be able to invest up to 20 percent of their assets in alternative investments, AltAssets understands.

In a bid to diversify risk and bolster profit, previous rules which only allowed pension funds to invest in public debt and other low-risk portfolios will be amended according to Reuters, which cited government and pension fund sources.

The change, which is set to be announced before the end of March, will allow for about $10bn of capital to go toward real estate, commodities, private equity, hedge funds, and other so-called alternative investments.

The finance ministry said, “The international experience has shown how pension fund administrators have looked for non-traditional investment possibilities, taking into account the need for long-term profit and deposit security,” according to Reuters, which saw a technical bulletin that forms part of the draft decree.

“These instruments have served to diversify the risks that portfolios confront in the face of low international interest rates.”

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