The £1.4bn (€2.2bn) pension scheme of Hertfordshire County Council, the UK local authority, plans to increase its allocation of private equity to 5% of assets, making £60m available to the asset class.

Hertfordshire's decision to step up private equity investment comes at a bad time for UK local authorities investing in alternative assets. Local authority funds received a return of -14.7% for the year ending March 31, 2002 on private equity investments, despite strong returns in the preceding three years, according to WM, the performance measurement company.