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Italian funds' huge asset rise

Total assets under management within Italy’s sector-wide and open pension funds increased by a massive 124% from the end of 1999 to the end of 2000, according to figures from Italian regulator, Commissione di vigilanza sui fondi pensione (COVIP).
The closed-end funds now manage L2.3trn (e1.88bn), an annual increase of 119%, and the open funds handle L1trn, an increase of 136%.
The largest sector-wide fund, Cometa, for Italy’s mechanical and metal workers, grew to L999bn by the end of last year and now covers 335,000 workers out of a potential 1m.
The first of the new funds, established after the 1993 law, chemical and pharmaceutical workers fund Fonchim, boasts L710bn in assets for its 106,000 members, out of a potential of 185,000workers.
Automotive group Fiat’s pension fund for executives and professionals Quadri e Capi Fiat covers over 91% of its potential 16,371 members and has assets valued at L89bn.
However, only 12 of the 43 closed funds are actually fully operational, although 23 received final authorisation from COVIP last year. A further 19 are still waiting for the green light to begin collecting contributions.
In total, the sector funds, including those without full authorisation, currently cover 885,000 members from a potential 13m employees.
And COVIP’s figures show that the four biggest closed-end funds are still relatively conservative in their asset allocation.
Cometa invests only 17% in equities, while Fonchim is slightly more adventurous with 25% in shares.
Fondenergia has a 21% equity holding and Quadri e Capi Fiat has a 26% share weighting.
Certainly, there is room for growth: according to estimates of the Italian ministry of the treasury 12m Italians work as employees in the private sector and a further 6m are self-employed, while only 891,000 employees and 218,000 entrepreneurs are covered by a closed or open fund.
The number of pension fund contributors, however, is growing steadily, with the figure for scheme participant employees growing by 27% and the number of self-employed workers covered rising by 62% last year.

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