City of London may tighten reins on pension fund

* Mulls boost to private equity allocations

* May set more restrictive asset allocation targets

By Cecilia Valente

LONDON, Nov 4 (Reuters) - The pension scheme of the City of London is considering tightening the reins on its fund managers to get more control over investment decisions after a tough 2008.

The scheme is also mulling whether to invest more in alternatives like private equity to broaden its assets and help weather market changes.

The City's defined benefit (DB) pension scheme and two charity funds, which look after parks and maintain bridges in the square mile financial district, have combined assets of about 1.4 billion pounds ($2.31 billion).

The DB scheme currently sets broad allocation targets with about 80 percent in equities and allows fund managers to make unconstrained investment decisions to exploit market movements while some have scope to switch in and out of the asset classes.

"At the moment we give them (fund managers) quite a degree of discretion," said Paul Mathews, corporate treasurer at the City of London Corporation.