The fund currently has about 5 per cent invested in private equity and under Finnish regulations it can invest as much as it requires.

Jari Sokka, the fund’s executive director, told epn that private equity was a very attractive asset, particularly in today’s difficult investment climate.

He said: “I think it boils down to asset liability. We did an asset study that gave us the optimal allocation and in that respect we needed more private equity. It has good characteristics with high returns but it can be a difficult model to assess risk.”

Mr Sokka added that private equity investments were very time-consuming compared to simpler classes such as bonds and equities.

Currently, Keva has 50 per cent invested in equities, 32 per cent in fixed income, 8 per cent in real estate and the remainder in alternatives.

Mr Sokka pointed out that in the volatile equity markets, the fund’s equity allocation could fluctuate between 45 per cent and 55 per cent, but he denied that there would be any other major changes to the fund’s overall allocation this year.

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