Shell Pension Fund is to increase its allocation to private equity from £220m (E358m) to £570m over the next three years. The new weighting will represent 5% of the £11.4bn fund, bringing its exposure to the asset class in line with that of US pension funds.

Nick Pettinati, investment director of Shell Pension Fund, said that earlier private equity investments had performed well and were not as volatile as some traditional asset classes: 'We look for assets which provide diversity as well as enhancing the overall return of the funds. Private equity in many ways meets these criteria.' He stressed that the level of commitment was complicated to manage due to the nature of the asset class. 'If you rush to invest, the portfolio will be front-ended with zero or even negative contributions for the early years. Adding to the portfolio steadily will lead to balanced maturity and steady performance over a period of years.'