Fondo Pensione Cometa has launched a tender process to appoint up to 14 asset managers to mandates worth €8.3bn as part of a shift towards active management.
Italy’s largest industry-wide pension fund, covering the metal and mechanical engineering sectors, launched the requests for proposals covering its monetary plus, income and growth portfolios, having previously announced its intention to re-tender most of its €9.6bn portfolio.
The monetary plus fund, currently worth €2.8bn, will be tendered out to at least two but up to three managers, which will be expected to maximise return while keeping annual volatility below 1%, and without investing in equities.
Asset managers will be expected to limit investments to bonds rated above BB+, and will be able to invest up to 30% in corporate bonds issued by companies in OECD member states.
A further 5% can be invested in corporate debt from companies outside the OECD, as long as it is denominated in euros.
The income fund, currently €4.9bn and to be split among as many as eight managers in future, will also be permitted to invest in assets rated higher than BB+, with an upper limit of 9% on assets rated BB+ and BB-, investing in multi-asset total-return strategies.
The smallest of the three tenders, the €575m growth fund, could be divided among up to three managers, limiting annual volatility to 8% while invested in multi-asset strategies.
As with the other two funds, managers will not be limited in their exposure to assets rated better than BB+, but Cometa will impose a 12% hard cap on assets rated between BB+ and BB-.
Both the income and growth fund should limit corporate bond exposure to countries based in OECD countries to 40%, while no more than 12% of the income fund’s assets should be invested in sovereign or government-backed bonds issued by countries outside of the OECD.
The income fund will be allowed to invest up to 40% in equities from OECD countries, with a 5% upper limit on listed equities from outside the OECD.
The growth fund has a higher, 70% limit on equities, with an allowance of up to 10% invested in equities listed outside the OECD.
Additionally, bonds from issuers outside the OECD must be denominated in US dollars or euros.
Managers have until 4 May to respond to the request for proposals.