Italian pension funds are stepping up allocations to private markets across domestic and European strategies, as they seek diversification and protection from volatility.
Fondo Telemaco, the €2.7bn pension fund for employees in Italy’s telecommunications sector, has made its first move into infrastructure and is reviewing its strategy to further expand exposure to alternatives.
Head of finance Ramona Libertucci told IPE that Telemaco has added infrastructure as a new asset class for diversification, making a €20m direct investment in a fund of funds (FoF) managed by CDP Real Asset.
Telemaco has also invested in the FoF Private Equity Italy, one of three investment vehicles – alongside infrastructure and private debt FoFs – set up under the Real Economy Project (Progetto Economia Reale), launched by pension fund association Assofondipensione in partnership with Cassa Depositi e Prestiti (CDP) and asset manager Fondo Italiano d’Investimento, Libertucci said.
The move follows a strategic asset allocation review that led to higher private market targets. Telemaco has lifted private market allocations in its sub-fund ‘Prudente’ from 6% to 12%, and in ‘Dinamico’ from 12% to 15%.
The pension fund is also seeking an alternative investment fund manager to deploy €147m in private debt and managers for €22.5m in private equity secondaries in Europe and globally, according to tender documents. The deadline for bids is 24 November.
Libertucci said the shift aims to further diversify the portfolio, enhance returns through uncorrelated asset classes, and mitigate volatility and inflation risk.
Private equity and private debt
Other Italian pension funds are making similar moves.
The pension fund for employees of the UniCredit group – Fondo Pensione per il Personale delle Aziende del Gruppo UniCredit – has selected Finint Investments, part of the Finint bank group, to invest €224m through new multi-asset and alternative investment fund (AIF) mandates.
The investments will target private equity and private debt funds with a European focus. Finint will also take over management of an existing €111m AIF portfolio previously run in house, the scheme said.
The changes are part of a broader effort to capture new opportunities over the long term, the UniCredit fund added.
Infrastructure
Fonchim, the €9.2bn pension fund for Italy’s chemical sector, also began investing in infrastructure this summer, while Alifond, the pension fund for employees in the food industry, has adjusted its strategy to introduce infrastructure equity.
Alberto Salato, head of the southern Europe client group at Neuberger Berman, told IPE that Italian pension funds “will certainly continue to allocate to alternatives” given the positive returns achieved so far, de-correlation benefits, and reduced overall volatility.
“Another factor in favour of continued growth [in private markets investments] is the fact that other Italian pension funds, some of them large, have yet to make their first allocation to alternatives,” he added.
Salato noted that defined contribution pension funds tend to favour private equity, which offers total returns more aligned with their structure.
Neuberger Berman sees Italian pension funds opting for diversified mandates, typically overweighting Europe and maintaining smaller global allocations.
A domestic focus remains a consistent feature, Salato said, with “part of the portfolio always dedicated to alternative investments with a focus on the Italian real economy.”
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