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Italian pension fund Fondo Arco tenders four mandates worth €400m

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  • Milan, Italy

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Fondo Arco, the Italian pension funds for workers employed in the wood, furniture, forestry, brick and concrete sectors, is searching for four managers for its €403m Bilanciato Prudente sub-fund.

The €484m scheme launched the tender shortly after releasing its newly approved 2013 balance sheet, which saw a 12% increase in assets under management, from around €424m at the end of 2012 to €474m at the end of last year.

Fondo Arco offers five-year mandates for a mixed equity, government bond and corporate bond portfolio of assets, which it forecasts will increase by €20m during 2014, thanks to contributions from current members.

The tender was launched as the previous mandates for the sub-fund, held by Credit Suisse, Unipol Assicurazioni, JP Morgan Asset Management, Eurizon Capital and Natixis Asset Management, came to the end of their term.

The scheme sets a benchmark for the sub-fund structured as follows:

  • 25% JPM Gov. Bond Emu IG 1-3
  • 25% JPM Gov. Bond Emu IG All maturities
  • 10% IBbox Eur Liquid Corporates 100
  • 10% BofA ML Direct Government Inflation Linked

  • 15% MSCI Kokusai (World ex Japan)

Fondo Arco also specifies that the equity portion will vary from a minimum of 20% to a maximum of 40% of the portfolio.

The maximum investment in equity collective investment schemes will be 15%, while the maximum corporate bond exposure will be 15%.

Foreign exchange risk will be actively managed and set at a maximum of 25%.

Tracking error volatility will be limited to 4% per year.

The scheme adds that prospective managers will have to comply with its guidelines for ESG investment approved last year. 

The deadline for applications is 26 May. 

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