Italian industry-wide pension funds (Fondi Negoziali) have expressed support for lifting the legal threshold that limits allocations to private markets to 20% of assets under management.
The proposal to raise the cap was recently floated by Maria Luisa Gota, chief executive officer of asset manager Eurizon Capital and president of asset management association Assogestioni, in an interview with daily Italian newspaper Corriere della Sera.
Gota said expanding allocations to private markets is one of the key measures needed to strengthen Italy’s second pillar pension system.
Luca Ruggieri, director of Fondo Gomma Plastica – the pension fund for workers in the rubber and plastics sector – strongly supports the idea.
“Raising the current 20% threshold is positive, and would leave it up to each individual pension fund to decide the percentage and type of asset class to invest [in private markets],” he told IPE.
Ruggieri highlighted the particular opportunities for private equity investment in Italy, given the limited size of domestic companies, market fragmentation, and the upcoming generational transition that will affect many businesses.
He added that increasing the cap would also help funds avoid pressure to liquidate private assets at a discount due to the so-called denominator effect, where the share of private assets rises as the value of other asset classes falls, effectively forcing funds to stay below the 20% limit.
David Galliano, director general of Foncer – the pension fund for employees in the ceramic and refractory materials industries – also supports the proposal, but said it is essential to fine-tune the technical aspects of investment rules.
He said regulatory adjustments are needed to make them consistent with investment operations and to address constraints beyond funds’ control, such as the denominator effect.
Changes could include setting a limit for commitments or defining a timeframe for divestments, Galliano said, backing in principle Assogestioni’s proposal to lift the limit on alternatives.
Massimo Malavasi, general director of Arco – the pension fund for workers in the wood, furniture, forestry, brick and concrete sectors – also told IPE that it is appropriate to give pension funds greater flexibility to expand their private markets exposure in order to further diversify portfolios, improve returns and channel more capital into the “real economy” in Italy and Europe.
Supporting the domestic economy
Italian pension funds are increasingly supporting the domestic economy through consortia and public-private partnerships.
Assofondipensione, the pension fund association, is preparing a new round of private equity investments with asset manager Fondo Italiano d’Investimento, which is majority owned by CDP Equity, the private equity arm of state-owned investment bank Cassa Depositi e Prestiti (CDP), said Andrea Mariani, the association’s secretary and general director of Fondo Pensione Pegaso, during a debate organised by financial newspaper Il Sole 24 Ore.
Assofondipensione is also in talks with CDP Venture Capital – the venture capital arm of CDP – to set up a venture capital fund that would benefit from tax incentives, Mariani added.
Under current rules, first pillar pension schemes (Casse di Previdenza) and industry-wide pension funds (Fondi Negoziali) will be exempt from taxes if at least 10% of their basket of qualified investments is allocated to venture capital from 2026.
Raising the 10% threshold for qualified venture capital investments, increasing the 20% limit for private markets, and – crucially – expanding membership and assets under management would all help boost investment in the real economy, according to Mariani.
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