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Ircantec, the €9.8bn French public sector pension scheme, has decided a new strategic asset allocation that places much less weight on nominal government bonds. It has cut its sovereign bond weighting from 30% to 10% as part of the changes.The new allocation includes:Equities: 40%Inflation-linked debt: 20%Sovereign bonds: 10%Credit: 20%Real assets: 10% The real asset category includes real estate, private equity, private debt, and infrastructure.Caroline Le Meaux, head of delegated management at Caisse des Dépots et Consignations, Ircantec’s fiduciary manager, told IPE the scheme had been working on the new strategy for at least a year, having diversified its bond and equities portfolios.“The bond portfolio used to be euro-centric but is now more global. Equities also used to be euro-centric but are now more global,” she said.The decision to increase exposure to equities and real assets and broaden its bond exposure was a response to the low yield environment, according to Le Meaux.Ircantec’s current allocation to equities is already 36%, and it is also already at its target for credit.CDC is looking for an overlay manager for Ircantec in connection with the new asset allocation, and launched a request for proposal a week ago. The mandate is for risk management of the entire portfolio, and will be “embedded” in a €1.2bn global sovereign debt fund, according to Le Meaux.“Because overall the risk profile is increasing, Ircantec needs a tool to manage the risk,” she said.The new strategic allocation is for four years, but can be changed during that period.Ircantec’s previous strategic asset allocation had a 29% allocation to equities and 5% allocation to real assets, with everything else in bonds.There was a 45% allocation to nominal bonds, with around 30% of that being for sovereign bonds.