Venetian fund tenders bond mandate to diversify portfolio
ITALY - The €550m Italian pension fund, Fondo Pensione Solidarietà Veneto, is looking to select two new asset managers to run new mandates as part of its plan to diversify its portfolio.
The Venice-based pension scheme, which runs four investment options, is seeking to select a new asset manager to run a €72m balanced bond portfolio within its €145.15m Prudente investment business.
The Prudente investment option is currently being managed by Unipol - which delegates responsibility for equities to JP Morgan Asset Management - and invests 90% of its portfolio in European sovereign bonds - including UK and Switzerland - and 10% in SRI equities.
In an interview with IPE, Solidarietà Veneto's director, Paolo Stefan, said that the selection of a new asset manager came about as a result of the fund's new investment policy.
He said: "Our policy stipulates that one asset manager can run a mandate of €80m or €90m only at the time. So when the size of assets under management one of our portfolios goes beyond this amount, we have no other options but to tender a new mandate."
Additionally, the Italian pension fund is also seeking to tender a €25m corporate bond mandate covering three of the scheme's investment options - Prudente, as well as the €282m Reddito business, invested in bonds (75%) and equities (25%); and the €73.5m Dinamico line, split equally between bonds and equities.
The Italian scheme said it intended to add a 5% corporate bond investment to all three approaches as a way of diversifying its portfolio, which is currently highly concentrated in government bonds.
The fourth investment option, Garantito, invested in bonds (95%) and equities (5%), is not out for tender, Stefan added.
Stefan went on to say that the tender came at a time when its pension fund's portfolio was highly concentrated in European government bonds.
"Our portfolio has not felt the impact of the sovereign debt crisis in Europe yet," he said. "However, we prefer to diversify our portfolio and move away from government debt in order to anticipate a potential hit."
Stefan also told IPE that the priority will be given to an asset manager with good knowledge of the Venetian region as the pension fund is willing to invest in corporate bonds issued by banks, corporate and public entities in the area.
He nonetheless conceded that Solidarietà Veneto might have some difficulties in selecting an asset manager focusing on the region and would therefore consider all responses from asset management firms with a strong knowledge of the European market.
Solidarietà Veneto is expected to select the two asset managers in October this year, with the managers potentially running the portfolios by the beginning of next year.
Responses must be submitted by 7 September.