A fund of funds vehicle could represent a solution to channel institutional investors’ capital towards the real economy, undersecretary of state at Italy’s Ministry of Economy and Finance (MEF) Federico Freni said speaking this week on the margin at an event organised by asset management association Assogestioni.

Freni believes that structural changes are necessary to reduce the fragmentation of the investments, he said, adding that In Italy the sizes of the investments remain small. 

“Probably the solution is to envisage is a larger box, for example a fund of funds, that can channel the right size [of capital for investments], given the peculiar structural characteristics of the Italian market,” he said. 

The real economy in Italy “desperately needs” savings, and funds, as private savings largely contribute to boost investments currently, Freni added.

Mixed public-private vehicles for equity investment supporting companies’ capitalisation would contribute to the growth of Italy’s economy, he said.  

“A tax policy that would create incentives for institutional investors to channel savings towards the real economy is [also] absolutely necessary right now,” he added. 

The idea of a fund of funds echoes the proposal for a public-private fund of funds for alternative investments put forward by pension fund Cometa. 

Cassa Depositi e Prestiti (CDP), the partly state-owned investment bank, would be responsible for issuing the shares in the fund, protecting the investments against potential losses, according to Cometa’s proposal.  

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