Italian pension funds are stepping up allocations to venture capital focused on aerospace, cybersecurity and defence, as they look to back strategic industries while pressing for clearer rules and a more stable framework for long-term investment.
Cassa Dottori Commercialisti (CDC), the €14bn first-pillar pension fund for chartered accountants, is scouting buyout and venture/growth funds in Italy and abroad, targeting companies active in artificial intelligence, cybersecurity and digitalisation, including applications in space and defence.
“We have to work as Europe today, because as Europe we have to emancipate ourselves from the US and China, in a historical context where we have to create our own systems, especially in AI, cybersecurity, and defence,” chief executive officer Fabio Lenti said at a venture capital event organised this month by Confindustria.
CDC is re-entering the asset class after investing in two funds more than a decade ago. “We are confident that we can look forward to a new era of VC investments,” Lenti said.
Fondo Pensione Nazionale BCC/CRA, the pension fund for employees of co-operative banks, has committed €75m to venture capital, including investments in aerospace, described as one of Italy’s areas of excellence, general director Giuseppe Longo said.
Backing the aerospace sector is further evidence of the fund’s support for the domestic economy, which Longo described as a “duty” of long-term investors.
However, he cautioned that “the system has to grow”, calling for larger funding rounds, a stable regulatory framework and stronger professional teams within asset management companies to encourage higher institutional allocations to venture capital.
Both first- and second-pillar pension funds benefit from tax deductions for investments in domestic start-ups, but the rules are proving complex in practice.
Cassa Notariato has appointed a law firm to conduct a compliance study to determine the precise share of qualifying investments required to access the deduction, chief investment officer Stella Giovannoli said.
The fund is also selecting venture capital managers and expects to begin investing in the coming months, subject to the legal opinion, she added.
Meanwhile, the €30bn doctors’ scheme Enpam has invested in the Large Ventures fund managed by CDP Venture Capital, the venture capital arm of Italy’s partly state-owned investment bank, according to its president Alberto Oliveti.
