ITALY - Eurofer, the 104 million-euro pension fund for railway workers, has selected its first asset managers.
Generali Asset Management, Unipol, RAS Asset Management and Sanpaolo-IMI began their four-year mandates on November 5.
Generali and Unipol will each run 30% of the portfolio while RAS and San Paolo will share the remaining 40% equally. Unicredito acts as Eurofer’s depositary bank.
The fund, authorised last year, has made this decision after a “careful and considerate” selection process, which has involved about 30 asset managers, a spokesman for the fund told IPE.
Eurofer has also received “competent” support by internal and possibly external consultants, the spokesman added.
The investment strategy will be a balance of investments in bonds (80%) and equities (20%) to mirror the workers’ inclinations, the spokesman said.
Managers can only select bonds rated from a minimum of BBB- or Baa3, depending on rating agencies.
Equities will have to conform to the Socially Responsible Investments indices “in a bid to achieve a correct use of the members’ investments”.
So far the fund has been joined about 31,000 members, one third of the potential 95,000 membership.
“The fund has not yet reached its full potential and much depends on the development of the pension reform through the implementation decrees,” the spokesman explained.
In its official notification, Eurofer said the board of directors has also decided to guarantee a minimum return of 2.5% a year on 60% on investments for those who leave the fund to retire or stop working because of total and permanent invalidity or die.
“This provision has been decided to cover those who do not leave the fund of their own decisions during economic downturns,” the notification reads.
Eurofer’s chosen benchmarks are Govt JP Morgan Gov. Bond Emu in Euro (40%), JP Morgan Gov. Bond Emu all maturities (40%), E-Capital Ethical Index Euro (5%) and E-Capital Ethical Index Global (15%).
Managers are also expected to provide the pension fund with regular reports.