ITALY – The selection process to find investment managers for Previvolo, the pension fund for pilots of Italy’s state carrier, Alitalia, has entered its second phase.

The fund, valued at €52m with a total of 2,600 members, concluded the initial stage last month. “We are now looking to draw up a shortlist of three or four managers in the coming weeks who will then be invited to make a detailed presentation,” says a spokesman for the Rome-based fund.

Eventually the fund will choose three managers to invest its assets in four investment ‘lines’ split between portfolios as follows:

•Fixed income - Italian government and developed markets corporate bonds.
•As above but with a European and global equity portion not in excess of 25%.
•Balanced - equities between 25% and 70% plus fixed income as above.
• Minimum 60% equity element. The rest will be fixed income.

It is likely that each manager will be responsible for a third of each investment line for a four year period. “This is the structure we are working towards but obviously if a certain management firm proves that it does best with just equities, for example, then we may change our strategy accordingly,” says the spokesman.

The fund’s assets are expected to increase dramatically once the management of its assets is up and running, says the spokesman. “From an Anglo-Saxon perspective, Italian funds are tiny. But pensions reforms in Italy mean that more and more funds are gearing up to move from traditional pay-as-you-go to defined contribution structures where the assets are invested to generate returns and make them grow. We anticipate tremendous growth in the near future”

Previvolo is one of three pension funds that Alitalia is looking to take in this direction. A similar style fund for flight attendants has been submitted to Covip, the supervisory body for authorisation, and another is on the drawing board for ground staff.

Moreover, the funds will be open to non-Alitalia employees working in the same sectors. Previvolo’s membership is expected to grow by at least a 1,000 new members.