Italy’s pension funds association Assofondipensione is closely exploring investment opportunities for its members industry-wide pension funds (Fondi Negoziali) with the European Investment Fund (EIF).

Speaking at the association’s annual general meeting (AGM) this week, president Giovanni Maggi said that “in-depth analysis are underway” with the EIF “to assess the characteristics and possible solutions” matching the need of second pillar industry-wide pension schemes to invest in European markets.

Italian pension funds Arco, Concreto, Fondo Pensione Byblos and Fon.Te met a few months ago with top EIF executives in Luxembourg, including the chair of the fund Gelsomina Vigliotti, and chief executive officer Marjut Falkstedt, Maggi wrote in a LindekIn post.

The schemes plan to boost investments in Europe, taking as a model the public-private partnership Real Economy Project (Progetto Economia Reale) launched by Assofondipensione with the partly state-owned investment bank, Cassa Depositi e Prestiti (CDP), and asset manager Fondo Italiano d’Investimento.

The three fund-of-funds (FoFs) – private equity, private debt and infrastructure – set up under the Real Economy Project, have reached a volume of €1.15bn, Maggi said during the AGM.

Giovanni Maggi at Assofondipensione

Giovanni Maggi at Assofondipensione

He added that 18 industry-wide pension schemes allocated assets to the real economy project so far. CDP has also deployed public funds via the Ministry of Economy and Finance.

The private equity FoF has recorded an internal rate of return (IRR) of 4.5%, Maggi added, to explain why schemes opt to invest in private markets under public-private partnerships.

Assofondipensione believes the Real Economy Project has further to grow, in the interest of the pension funds and their members, and in order to diversify investments in the long run, he continued.

The Real Economy Project is open to exploring new forms of public-private partnerships, with the hope that CDP and political decision-makers help up to channel a larger share of pension savings inro the real economy, protecting investments, Maggi said.

The Real Economy Project, like the EIF, invests predominantly in small and mid-sized companies.

Looking for IPE’s latest magazine? Read the digital edition here