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Italian schemes issue first tender for joint private equity investment

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A consortium of five Italian pension funds has launched a search for a private equity manager for a joint portfolio worth €216m.

The consortium, named ‘Progetto Iride’ (Project Iris), was set up last year with the goal of building a portfolio of alternative investments.

The five investors in the consortium are industry-wide defined contribution (DC) pension funds Foncer, Fondenergia, Fondo Gomma Plastica, Pegaso and Previmoda. As of December last year, the funds had a combined €6.1bn of assets under management.

The consortium has set up a website for the project, according to which the collaboration “stems from a deep analysis of the alternative investment market, as well as the conclusion that these investments are sustainable over the medium term given the funds’ positive contribution flows”.

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“These investments are also expected to improve our yield expectations and provide a considerable contribution to performance,” the pension funds said. “In this phase of low yields, the goal of these investments is to achieve further diversification of our portfolios and sources of return, in order to strengthen the return objectives of our members”.

The consortium is looking for managers investing primarily in Europe. A significant portion of the investments are expected to be in Italian companies. Managers will focus mainly on buyout and growth strategies.

The consortium has earmarked €216m, split between the five funds:

Source: Progetto Iride
Fund Allocation 
Fondenergia€72m
Fondo Gomma Plastica €46m
Previmoda €39m
Pegaso €30m
Foncer €28m

Managers have until 3rd May 2019 to present their bid. Further information, including the tender announcement, can be found on the project’s website.

Last year IPE reported that a number of Italian industry-wide DC funds had formed the partnership with the objective of pooling resources to target investments in illiquid asset classes. Assofondipensione, the Italian association of industry-wide pension funds, known as ‘fondi negoziali’, spearheaded the initiative.

At the time Giovanni Maggi, chairman of Assofondipensione, told IPE: “The association has been working on a system-wide initiative for nearly two years.

“The objective is pooling assets, in order to present a stronger business case to asset managers and enhance the governance of investments. We also want to send a signal that funds can work together and play to their strengths in a complicated phase for financial markets.”

Calls for collaboration between fondi negoziali have been made repeatedly in Italy in recent years by authoritative voices in the industry, including pension fund regulator Covip. 

“This is the first initiative of its kind and could constitute a model for future partnerships where funds can work together to create strong synergies,” Maggi said.

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