Earlier this year, RPMI Railpen, investment manager for the £28 billion ($37 billion) pension fund serving the UK’s railway workers, embarked on a joint venture with the $66 billion Alaska Permanent Fund and Kuwait’s Public Institution for Social Security (PIFSS) to better access private markets.

Like many other asset owners, the trio have found competition and elevated prices has made accessing private markets difficult. The hope is that combining firepower and expertise in a joint venture will open up more opportunities. The joint venture, Capital Constellation, will invest in private equity and alternatives managers, and plans to deploy more than $1.5 billion in the next five years. The three funds manage about $200 billion in assets between them.

The project has revealed important lessons, Railpen chief investment officer Richard Williams says. First, asset owners should partner with investors that bring different elements to the party. In Railpen’s case, this means finding partners that can complement its ESG experience and UK presence, he says.

“It is also about finding heterogeneous skill sets that blend together,” Williams says. “There are lots of hurdles to jump through and we would like to do more initiatives like Capital Constellation, but only time will tell if we do. It won’t be for lack of intention.”

Preparing the ground at the beginning of a collaboration in case things grow tricky and parameters shift in the future is important as well, he says.

“It is a little bit like a prenup [prenuptial agreement],” Williams says. “If it doesn’t work out, all parties need to know how they can separate without it getting too acrimonious. I’m not suggesting the best marriages have to have a prenup, but sometimes love isn’t enough.”

For more on Railpen’s strategy see our profile Railpen reaps benefits of in-house team.

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Sarah Rundell is a staff writer for Top1000funds.com based out of London. She writes on institutional investment across all asset classes, global trade and corporate treasury.