The government's latest decision to increase the cap placed on the amount that local authority pension funds can invest through limited partnerships from 15 per cent to 30 per cent has been welcomed by the National Association of Pension Funds (NAPF).

The change to the Local Government Pension Fund (LGPS) investment regulations support the NAPF's view that funds should have greater capacity to invest in infrastructure initiatives and will take effect from 1 April 2013.

NAPF policy director Darren Philp said: "Many local authority pension funds have told us that they are prevented from making the best decision on investments because of out-dated rules which place limits on the amount that can be invested in infrastructure. So we are pleased that the government has listened and has made this change."

Philp added that the government still needs to "undertake a comprehensive review of the local authority pension fund investment regulations to ensure that funds can act in the best interests of their members and council tax payers."

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