Fondo Telemaco, the €2.7bn pension fund for employees in Italy’s telecommunications sector, is increasing allocations to private debt by investing in small and mid caps firms in Europe as part of its private market investment programme.
The pension fund has selected Finint Investments, the alternatives asset manager of Finint Bank, to invest €147m in private debt. Finint will pursue a multi-strategy approach working with multiple managers.
Telemaco will channel €96m from its Prudente sub-fund, and €51m from its Dinamico sub-fund to build a diversified pool of assets, primarily in Europe, with a focus on the domestic economy.
“In terms of target, we will invest on behalf of the pension fund primarily in SMEs and mid-caps, which represent the core of the real economy and a primary source of private debt opportunities,” Laura Baldin, head of sales at Finint Investments told IPE.
Exposure to European private debt will be built through a broad range of strategies, including direct financing and leveraged loans, alongside evergreen vehicles and secondary market (LP-led) transactions, with the aim of optimising the portfolio’s diversification and risk/return profile, she added.
The mandate allows for investments also in non-EU funds authorised for marketing, thus supporting a selective pan-European and global approach, Baldin said.
The manager will invest mainly in senior and unitranche debt of companies in Europe and the UK.
Exposure to the North American market is allowed only up to a maximum of 20% of the overall commitments, according to a Telemaco investment policy document.
The reasons for geographical diversification include building a resilient portfolio by spreading risk across different economies and credit cycles, access to private debt opportunities particularly in core European markets, where the segment is more mature, and support the Italy’s real economy in line with the pension fund’s mission, Baldin said.
“This approach limits correlation with listed markets while offering high capital protection during downside periods, thanks to the senior nature of the debt instruments. The absence of leverage at the mandate level helps maintain a prudent and controlled overall risk profile, Baldin said.
Private markets programme
As previously reported, Telemaco is increasing investments in private markets to 12% of the total €1.66bn assets held in the Prudente, and to 15% of the €890m held in the Dinamico sub-funds.
Its private markets investing programme, approved by the board of directors last September, so far includes €21m allocated to the Private Equity Italia 3 Fund of Funds (FoF) managed by Fondo Italiano d’Investimento, according to Telemaco’s investment policy document.
The FoF invests mainly in the primary and, to a lesser extent, in the secondary market, focusing on companies operating in Italy.
Telemaco is also investing €20m in infrastructure FoF managed by CDP Real Asset. The FoF invests in Italian companies and, up to a maximum of 30% of the total amount, in Alternative Investment Funds with an international focus but committing to invest an amount at least equal to the amount subscribed by the fund in Italian companies.
