Mario Pepe, chair of Italian pension regulator COVIP, has called for measures to “make Italy more investable” in order to channel more pension assets into the domestic economy through private markets and listed small and medium-sized enterprises (SMEs).
“The issue is not about mandating domestic investments; the issue is making Italy more attractive for long-term pension capital,” Pepe said today during the presentation of COVIP’s annual report.
According to Pepe, efforts are needed on both the demand and supply sides of the market.
He said policymakers should work to overcome the “historical limits of Italian family capitalism”, which remains heavily reliant on bank financing and characterised by small companies. At the same time, Italy should develop “more liquid, deeper, and more efficient capital markets”.
Pepe pointed to the state-backed Fondo Nazionale Strategico Indiretto (FNSI), which invests in Italian listed SMEs, as a model for pension funds seeking opportunities that meet risk-return and liquidity requirements.
His comments follow recent remarks by prime minister Giorgia Meloni, who said the Italian government intends to strengthen mechanisms aimed at increasing pension fund investment in the country’s real economy, particularly in start-ups and infrastructure.
“Something is not working if of €260bn [pension funds assets] only €40bn is invested in Italy, and therefore a solution to this problem must be found,” Meloni said.
Pepe agreed with the prime minister’s assessment, noting that around 80% of pension assets remain invested abroad, while investment in Italian SMEs is “close to zero”.
Asset growth
COVIP now oversees first and second pillar pension institutions managing around €400bn in assets.
Supplementary pension schemes – including industry-wide pension funds (fondi negoziali), open pension funds and pre-existing pension funds – managed €262bn at the end of 2025, up 7.7% from a year earlier, according to COVIP data.
Meanwhile, first pillar pension institutions (casse di previdenza) managed €136bn in assets last year, representing a 6.7% increase at market value compared with 2024.
Pepe said the continued growth in assets increases the importance of governance standards, investment management, financial transparency and long-term sustainability across the sector.
Membership of supplementary pension schemes exceeded 10 million for the first time in 2025, while consolidation continued, with the number of pension funds falling by more than half over time, he said during the presentation.
COVIP is also supporting the creation of new pension funds to broaden second pillar pension coverage across Italy.
As part of that effort, the regulator has launched an initiative to extend access to supplementary pension arrangements to members of religious orders and employees of Catholic schools and hospitals.
Pepe also said he had personally asked defence minister Guido Crosetto to allocate part of the planned increase in defence spending, agreed with NATO allies, to establish a pension fund for military personnel, “which has been long awaited”.
