Hermes, the BT Group pension fund manager, is thought to be considering putting 10 per cent of the fund's £30bn of assets in "alternative" investments such as hedge funds, as it seeks to plug a gaping pension hole.

It is understood that it hopes to raise its holdings of non-traditional assets such as private equity, hedge funds, commodities and private finance initiative schemes to £3bn as the mature fund reduces its £20bn exposure to equities. Most of the rest would be put into bonds.